Bank of America Securities: Upgraded FLAT GLASS (06865) rating to "Neutral" with a target price of 12.8 Hong Kong dollars.

Bank of America Securities released a research report stating that the rating of FLAT GLASS (06865) has been upgraded from "underperform" to "neutral" as third-quarter net profit reached 376 million yuan, exceeding expectations, mainly due to a gross profit margin of 16.8%, far exceeding the bank's forecast of 8-9%. The bank raised its profit forecast for FLAT GLASS for the 2026 fiscal year by 55% and increased the target price from 7 Hong Kong dollars to 12.8 Hong Kong dollars. The valuation is based on a forecasted price-earnings ratio of 15.5 times for the 2026 fiscal year, up from 13.5 times, in line with the five-year average. Due to the company's significant profit advantage compared to smaller or domestically focused competitors, the bank believes that the 16-17% gross profit margin in the past two quarters will become the company's new long-term base. However, concerns remain about weak demand for CECEP Solar Energy and the ongoing oversupply situation, and FLAT GLASS's stock price has already risen by 12% after the earnings announcement, with valuation now trending towards reasonable levels.