＜Research＞BOCI: Investigation into FUYAO GLASS May Cause Short Term Shr Price Stir, But Fundamentals Remain Solid & Good

　　FUYAO GLASS (03606.HK) -3.800 (-8.568%) Short selling $9.58M; Ratio 9.673% announced that its wholly-owned subsidiary Fuyao Glass America, located in Moraine, Ohio, US, has been subjected to an on-site search by US federal agencies and local law enforcement support personnel. However, the company stressed that Fuyao America is merely cooperating with an ongoing investigation by US government agencies into a third-party labour service company.

　　According to a research report by BOCI, Fuyao America's Ohio plant is FUYAO's automotive glass production base in the US, with a total capacity of about 5.5 million units. In 2023, Fuyao America generated a revenue of RMB5.6 billion and a net profit of RMB494 million. Excluding the small external sales amount of float glass, it is estimated that the Ohio plan will ship approximately 4.2 million pieces of automotive glass, contributing more than RMB4 billion in revenue and accounting for less than 15% of FUYAO's overall revenue.

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　　The broker expected FUYAO's official response to the investigation to help ease investor concerns over the weekend. Although the incident may disturb the stock price in the short term, the broker believed the company's fundamentals remain solid and positive.

　　BOCI maintained its Buy rating on FUYAO with a target price of HK$55. The broker additionally advised investors to keep an eye on the company's 2Q24 results coming in early August.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-26 16:25.)

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