[ET Net News Agency, 21 May 2018] Citi Research lowered its target price for Fuyao
Glass Industry (03606) to HK$27 from HK$33.2, and downgraded its rating to "sell" from
"buy".
The research house said Fuyao reported disappointing 1Q results. It now expects Fuyao's
auto glass total production cost to hike by 13.2%/11.5%/10.3% YoY in 2018-20, factoring in
(1) 85% float glass self-supply ratio; (2) 10% YoY soda ash price decrease in 2018 (versus
previous forecast at -20%); (3) Rmb750mn forex loss in 2018.
Citi lowered its 2018-20 GPM forecast to 43.1/43.3/44.2% & OPM to 18.1/18.5/20%, with
which the research house revised down its 2018-20 net profit forecast to
Rmb3.3bn/3.7bn/4.5bn. (KL)