Guolonghui October 18th｜CICC released a research report stating that Fuyao Glass's third-quarter total revenue increased by 13.4% year-on-year, slightly below expectations. This was mainly due to weak demand in some US and European markets, leading to overseas revenue slightly lower than expected, but the average price increase for automotive glass in the third quarter still maintained a high level of 8% to 9%. Third-quarter net income increased by 53.5% year-on-year to 2 billion yuan, mainly due to the continuous improvement of gross margin, exceeding expectations. CICC stated that although freight and energy costs increased quarterly, Fuyao Glass's gross margin in the third quarter exceeded expectations, increasing by over 1 percentage point to 38.8% quarterly. The performance of overseas bases varied during the period, with its German subsidiary SAM benefiting from customer compensation of 22.5 million euros, achieving a profit of 12 million euros, while the profits and operating profit margins of the US base were lower than expected. The bank lowered the group's revenue forecast for 2024 to 2025 by 2% to 3%, to 39 billion and 45 billion yuan respectively, and slightly reduced the net income forecast by 1 to 2%, to 7.2 billion and 7.9 billion yuan respectively. Despite the potential dilution of short-term profit margins from the release of new production capacity in the next two years, the group continues to upgrade its products under the trend of electrification and maintain a strong leadership position in the global automotive glass market. The rating remains "buy," with the H-share target price lowered slightly from 68 Hong Kong dollars to 65 Hong Kong dollars.