Morgan Stanley analyst Tim Hsiao maintained a Hold rating on Fuyao Glass Industry Group Co., Ltd. Class H today and set a price target of HK$51.50.
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Tim Hsiao has given his Hold rating due to a combination of factors affecting Fuyao Glass Industry Group Co., Ltd. Class H. The company’s automotive glass volume grew by 9% year-over-year, and the average selling price (ASP) increased by 6% year-over-year, aligning with the company’s guidance. This growth is supported by a favorable product mix, with an increase in value-accretive products such as panoramic sunroofs and HUD systems.
Despite these positive developments, the core operating profit margin, excluding interest income and foreign exchange gains, only saw a moderate increase. While management anticipates reductions in shipping costs and capital expenditures, the net losses for FYSAM, a subsidiary, have been narrowing but are yet to reach profitability. These mixed results, along with the volatile global auto market, contribute to the Hold rating, suggesting that while the company shows potential, there are uncertainties that need to be addressed before a more favorable rating can be considered.
In another report released on August 7, TR | OpenAI – 4o also downgraded the stock to a Hold with a HK$62.00 price target.