Fuyao Glass Industry Group (03606) is poised to achieve a historic quarterly profit in Q2, according to BOCI's analysis. The brokerage forecasts a 13%-14% year-on-year revenue jump to RMB10.7-10.8 billion, driven by accelerating domestic auto glass sales growth exceeding 15% and steady overseas expansion. BOCI maintains its "Buy" recommendation while lifting the target price from HK$65 to HK$72, anchored to a 2025 price-to-earnings multiple of 20 times. The imminent Q2 earnings release could catalyze a reversal of the stock's underperformance this year.

Margin enhancement appears likely, with Q2 gross profit expected to climb over one percentage point above Q1's 35.4%. This improvement stems from amplified economies of scale, reduced rebate pressure from automakers, and declining costs for raw materials like soda ash alongside freight expenses. A substantial euro appreciation against the yuan may contribute over RMB300 million in foreign exchange gains. These tailwinds could propel quarterly net profit to unprecedented heights of RMB2.5-2.6 billion.

Overseas operations show promising momentum. The U.S. division anticipates sequential profit margin expansion, benefiting from heightened capacity utilization at Phase I facilities, operational efficiencies, and narrowing losses at Phase II plants. Full-year auto glass shipments should reach 5.1 million units, potentially exceeding the 13% operating margin target. Meanwhile, European subsidiary SAM's operating losses are projected to shrink from Q1's EUR2.9 million, inching closer to breakeven.

BOCI maintains its revenue forecasts but elevates 2025-2026 net profit projections by 5%-11% to RMB8.8 billion and RMB9.2 billion respectively. This adjustment reflects superior cost containment, supplementary forex gains, and strengthening international profitability. Among Chinese auto parts manufacturers, Fuyao distinguishes itself through strategic global capacity deployment. Its decade-long U.S. production infrastructure development provides exceptional operational resilience and geopolitical risk mitigation advantages in the current environment.