FUYAO GLASS (03606) is projected to achieve a 13%-14% year-on-year revenue surge in Q2, reaching RMB10.7-10.8 billion. This growth stems from accelerated domestic auto glass sales—expected to climb over 15% annually—and steady overseas market expansion. BOC International maintained its "Buy" rating while boosting the target price from HK$65 to HK$72, pegged to a 2025 P/E multiple of 20x. The brokerage anticipates Q2 earnings could catalyze a reversal of the stock's underperformance this year.

Gross margins are forecast to rise by over 1 percentage point from Q1's 35.4%, fueled by three key drivers: amplified scale efficiencies, reduced OEM rebate pressures, and lower input costs including soda ash and logistics. A sharp euro appreciation against the renminbi may contribute over RMB300 million in forex gains, potentially lifting Q2 net profit to RMB2.5-2.6 billion—a new quarterly peak.

Overseas operations show robust improvement trajectories. The U.S. base is set to enhance Q2 operating margins through optimized Phase-I capacity utilization and diminished Phase-II losses. Full-year auto glass shipments should hit 5.1 million units, likely exceeding the 13% operating margin target. In Europe, SAM's operating loss is narrowing toward breakeven, expected to shrink from Q1's €2.9 million deficit.

While revenue projections remain unchanged, BOC International raised 2025-2026 net profit forecasts by 5%-11% to RMB8.8 billion and RMB9.2 billion respectively. This adjustment factors in superior cost containment, supplementary currency benefits, and offshore profitability gains. Among Chinese auto parts peers, FUYAO GLASS demonstrates exceptional resilience through its strategic global footprint. Decade-long U.S. capacity investments now provide distinct operational advantages amid geopolitical volatility, enabling superior risk mitigation compared to domestic rivals.