[ET Net News Agency, 19 January 2018] Nomura lifted its target price for Fuyao Glass
(03606) to HK$38.4 from HK$26, and upgraded its rating to "buy" from "neutral".
The research house said its previous Neutral rating was premised on the low
profitability of Fuyao's new Dayton business in view of its high start-up costs and low
utilization, when the company's market share in China is unlikely to rise significantly
amid normalizing growth. Now, Nomura raised its FY2018/19 net earnings forecasts by
6%/10%.
On its surveys, Dayton I has been sustainably profitable in 4Q 2017, with 70%
utilization, while Dayton II commenced operation by end-4Q 2017. Going into FY2018, it
believes Fuyao America should contribute CNY2.8bn revenue to Fuyao, assuming 75% average
utilization and a continuous 7% ASP improvement thanks to product mix upgrades and raising
glass content per vehicle. (KL)
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03606 FUYAO GLASS
Nominal 
49.750 -0.100 (-0.201%) Others
19/01/2018 11:36
[I-bank focus]Nomura upgrades Fuyao Glass (03606) to HK$38.4
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