Citigroup Raises XINYI GLASS (00868) Target Price to HK$9.01, Citing Higher Valuation Multiple for Auto Glass Business

Stock News
Jan 19

Citigroup has released a research report indicating that, due to a significant surge in profit contribution from the auto glass business and its superior gross margin performance, it is raising the valuation multiple for XINYI GLASS's (00868) core glass operations to 10 times the forecasted price-to-earnings ratio for this year. Utilizing a sum-of-the-parts valuation methodology, which incorporates profit contributions from XINYI SOLAR (00968) and XINYI ENERGY (03868), Citigroup has increased its target price for XINYI GLASS from HK$7.55 to HK$9.01, while maintaining a "Neutral" rating. The bank has concurrently lowered its revenue forecast for XINYI GLASS for the years 2025 to 2027 by 5%, and reduced its gross margin forecast by 1.3 to 2.8 percentage points, bringing it to a range of 28.5% to 30.2%. Net profit forecasts for the same period have been cut by 21% to 38%, resulting in projected profits of 2.6 billion, 3.3 billion, and 3.7 billion yuan, reflecting pressures on the average selling price and margins of float glass. Citigroup remains cautious about the company's near-to-medium-term outlook, as the current economic and property market conditions continue to constrain its recovery prospects.

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