UBS: Fuyao Glass Industry Group (03606) average car glass prices continue to rise, target price raised to 95 Hong Kong dollars.

UBS released a research report stating that the management of Fuyao Glass Industry Group (03606) updated the operating conditions for the third quarter. The domestic factory capacity utilization rate has reached about 87% so far this quarter, an increase of about 2 percentage points year-on-year and an increase of about 3 percentage points quarter-on-quarter; the utilization rate of the phase one factory in the United States remains at a relatively high level of about 80%; the capacity expansion of the phase two factory in the United States is progressing smoothly, and it is expected that the utilization rate of this factory will reach about 40% in the second half of the year; transportation costs in the third quarter have significantly decreased year-on-year, which will help improve profit margins. The bank raised its profit forecast for the company by up to 13% for the years from this year to 2030, reflecting the faster-than-expected pace of new capacity expansion and price increases in the U.S. market. The target price for the stock was raised from HK$84 to HK$95, maintaining a "buy" rating. The bank expects the average selling price of the company's automotive glass to continue to rise. The main driving factors include the increasing adoption rate of functional products in the domestic market, such as full glass sunroofs, coated glass, and dimming glass; the increase in high value-added product contributions as European market electric vehicle orders are realized; price increases in the U.S. aftermarket products to pass on most of the tariff increases; it is worth noting that Fuyao Glass Industry Group has also increased the average selling price of products supplied by its local factories in the U.S., with an average price increase of 3% to 5% year-on-year from the beginning of the year to date.