＜Research＞JPM Suggests Accumulating FUYAO GLASS (03606.HK) Shrs at Current Weakness

　　A number of law enforcement agencies, including the US Department of Homeland Security and the US Internal Revenue Service, searched FUYAO GLASS (03606.HK) -3.850 (-8.681%) Short selling $9.58M; Ratio 9.673% 's wholly-owned subsidiary Fuyao Glass America in Ohio, in a wider search operation that covered 27 other locations unrelated to Fuyao America on 26 July local time. Fuyao America was not a target of the investigation and resumed production on the same day.

　　JPMorgan noted in a report that the impact of the incident is limited, but the share price may fall on the news. The broker suggested taking advantage of this weakness and buying FUYAO shares. The company will announce its results on 6 August.

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　　The broker believed FUYAO remained a top pick among the Chinese auto parts companies it covered, as it is bullish on the company's ability to grow its market share, from 30-35% currently to potentially more than 40% over the next five years. With the adoption of large sunroof glass, the company is believed to be able to increase revenue growth as glass content and value per vehicle increase. The broker expected FUYAO's full-year gross profit to be stable and on an upward trend.

　　The broker is optimistic about FUYAO's global leadership in the automotive glass market, and forecasted it to benefit from the increased penetration of electric vehicles and advanced driver assistance systems (ADAS) in the automotive industry, which will bring higher value-add and higher per-vehicle sales.

　　JPM maintained its Overweight rating on FUYAO with a target price of $50.

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

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