[ET Net News Agency, 22 November 2017] Citi Research lifted its target price for Fuyao
Glass Industry (03606) to HK$39 from HK$36.5, and maintained its "buy" rating.
The research house said the target price hike reflects better auto glass ASP outlook,
given its cost-plus pricing mechanism as float glass price increases (float glass accounts
for one-third of auto glass production cost).
The higher ASP is due to (1) a rare 0.7% wow national average float glass ASP hike
during a slack season, which was due to supply shortage in Northern China, where some
production lines at Hebei were shut down due to environmental issue; (2) resilient float
glass ASP in Southern China with that for Guangdong +8% yoy this week, according to Citi's
industry check; and (3) recovering 2018 auto sales volume growth under an upsizing trend,
which not only drives growing demand for auto glass but also helps demand converge into
high-end products. (KL)
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03606 FUYAO GLASS
Nominal 
47.250 +4.900 (+11.570%) Others
22/11/2017 17:47
[I-bank focus]Citi lifts Fuyao Glass (03606) to HK$39
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