[ET Net News Agency, 8 November 2017] Daiwa Research raised its target price for Fuyao
Glass Industry Group (03606) to HK$29 from HK$25, and maintained its "hold" rating, noting
limited margin expansion opportunities over 2018-19.
The research house was satisfied with Fuyao's decent top-line growth of 16% YoY for the
first 9 months of 2017 and recurring net-profit growth (excluding the forex effect) of 18%
YoY for the period.
From 2019-20, it believes the company will start to rely more on its overseas operations
for revenue growth as it already owns over 65% of China's automobile glass market.
Daiwa assumed Fuyao's US plant will generate sales volumes of 9m m2, 14m m2, and 20m m2
for 2017-19, respectively, reaching 8%, 11% and 15% of the company's total sales volume,
and equivalent to a 67% CAGR over 2016-19.
Daiwa lowered its 2018-19 EPS by 1-6% after trimming its gross margins. (KL)
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03606 FUYAO GLASS
Nominal 
41.600 +0.050 (+0.120%) Others
08/11/2017 15:03
[I-bank focus]Daiwa lifts Fuyao Glass (03606) to HK$29
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