DBS lowers the target price for LTC glass to HKD 6.4 and downgrades the rating to fully valued.

On May 26, Jin10 reported that DBS published a research report indicating that although Fuyao Glass (06865.HK) is actively reducing costs and increasing profits, the bank is concerned about the influx of new production capacity into the market. Despite the current oversupply, there are at least 10,000 to 12,000 tons of capacity being constructed daily, and the new supply is expected to limit the sales average price's upward potential in the medium term. However, the bank stated that due to the new electricity pricing mechanism, the expected capacity growth in the second half of the year will significantly slow down, and considering the weaker average price, it has lowered Fuyao Glass's revenue growth forecast for the next two years by about 11 percentage points. The bank also downgraded the group's target price from HKD 7.5 to HKD 6.4, and changed the rating from hold to fully valued. The bank expects the group's profits to fall by 18% this year but rebound by 29% next year.