According to the HSBC Global Research Report, Fuyao Glass (03606.HK) A-shares and H-shares have each risen by 33% and 29% in the past five months, outperforming the CSI 300 Index and the A-share Index's gains of 9% and 10% respectively, mainly driven by continuous improvement in profitability and stable business performance recovery.

The report also mentioned that Fuyao Glass's net profit in the third quarter increased by 54% year-on-year to 2 billion Chinese yuan, mainly benefiting from improved gross margin and enhanced operational efficiency, with performance broadly in line with the bank's expectations. The bank has raised its profit forecast for 2024 to 2026, based on the continued increase in domestic average selling prices and overseas market share, with a more positive outlook on sales volume and profitability.

HSBC Global Research also pointed out that the forecasted P/E growth ratios for Fuyao Glass A-shares and H-shares are only 0.9 and 0.8 times, lower than the average of 1.4 and 1.2 times from 2019 to 2022. The bank maintains a 'buy' rating on the stock, raising the H-share target price from 50.6 yuan to 68.2 yuan, believing that the potential demand improvement in the high season for automobiles in the fourth quarter of Fuyao Glass, potential bullish impact of raw material costs, and stable performance in the fourth quarter could be potential catalysts for the stock price.