Company Coverage
Fuyao Glass (3606 HK): 2Q26: Core Earnings Up 10% yoy On Margin Gain, Missing Our Estimates But Meeting Consensus; Cut Target Price To HK$84
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
HK$58.30
HK$84.00
44.1%
HK$100.00
Analyst
Highlights
- 2Q26 core net profit grew 10.4% yoy and 24.9% qoq to Rmb2.6b, missing
our estimate but meeting consensus forecasts. The 2Q26 earnings miss
stemmed from a top-line miss, offsetting the margin beat.
- We trim our 2026-28 net profit forecasts by 3%/2%/4% to
Rmb9,615m/Rmb11,658m/Rmb13,132m respectively on lower sales volume
and higher gross margin.
- Management stated that 2Q26 was the industry trough, and customer rolling
forecasts point to a recovery in 3Q26.
- Maintain BUY and cut target price from HK$100 to HK$84, as we lower target
PE multiple from 23x to 16x.
Analysis
- Fuyao Glass' (FYG) 2Q26 net profit came in below estimate at
Rmb2,259m (-18.6% yoy/+32% qoq) on forex loss. This brings 1H26 net
profit to Rmb3,970m (-17.4% yoy), representing 40% of our full-year
estimate. Forex gains/losses swung to a net loss of Rmb364m/Rmb803m in
2Q26/1H26 from a net gain of Rmb366m/Rmb600m in 2Q25/1H25. We now
factor in Rmb803m in forex losses for 2026, vs Rmb439m previously.
- Core net profit grew 10.4% yoy and 24.9% qoq to Rmb2.6b, below our
estimate of Rmb2.8b but in line with consensus forecasts. This takes
Fuyao Glass’ (FYG) 1H26 core net profit to Rmb4,682m (+14% yoy),
representing 43% of our full-year estimate. The earnings growth in 2Q26 was
driven by margin gains rather than top-line growth. 2Q26 core earnings
missed our estimates, with revenue miss offsetting the margin beat.
Highlights
- 2Q26 core net profit grew 10.4% yoy and 24.9% qoq to Rmb2.6b, missing
our estimate but meeting consensus forecasts. The 2Q26 earnings miss
stemmed from a top-line miss, offsetting the margin beat.
- We trim our 2026-28 net profit forecasts by 3%/2%/4% to
Rmb9,615m/Rmb11,658m/Rmb13,132m respectively on lower sales volume
and higher gross margin.
- Management stated that 2Q26 was the industry trough, and customer rolling
forecasts point to a recovery in 3Q26.
- Maintain BUY and cut target price from HK$100 to HK$84, as we lower target
PE multiple from 23x to 16x.
Analysis
- Fuyao Glass' (FYG) 2Q26 net profit came in below estimate at
Rmb2,259m (-18.6% yoy/+32% qoq) on forex loss. This brings 1H26 net
profit to Rmb3,970m (-17.4% yoy), representing 40% of our full-year
estimate. Forex gains/losses swung to a net loss of Rmb364m/Rmb803m in
2Q26/1H26 from a net gain of Rmb366m/Rmb600m in 2Q25/1H25. We now
factor in Rmb803m in forex losses for 2026, vs Rmb439m previously.
- Core net profit grew 10.4% yoy and 24.9% qoq to Rmb2.6b, below our
estimate of Rmb2.8b but in line with consensus forecasts. This takes
Fuyao Glass’ (FYG) 1H26 core net profit to Rmb4,682m (+14% yoy),
representing 43% of our full-year estimate. The earnings growth in 2Q26 was
driven by margin gains rather than top-line growth. 2Q26 core earnings
missed our estimates, with revenue miss offsetting the margin beat.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
HK$58.30
HK$84.00
44.1%
HK$100.00
Analyst
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