2Q26 Preview: Weak Revenue but Resilient GPM

Research evidence excerpt

2Q26 Preview: Weak Revenue but Resilient GPM

Update

July 7, 2026 04:21 AM GMT

Morgan Stanley Asia Limited+MFuyao Glass Industry Group | Asia Pacific Shelley Wang, CFA

Equity Analyst

2Q26 Preview: Weak Revenue Shelley.Wang@morganstanley.comTim Hsiao +852 3963-0047

Tim.Hsiao@morganstanley.com +852 2848-1982

but Resilient GPM Peggy Wang

Research Associate

Peggy.Pc.Wang@morganstanley.com +852 3963-3934

Key Takeaways Joey Xu, CFA

We estimate flat revenue growth in 2Q26. Despite weak auto production, we Joey.Xu@morganstanley.com +852 3963-0337

believe Fuyao continued to deliver ASP growth, thanks to mix upgrades.

We see upside potential to 2Q GPM, as we expect Fuyao to have managed GPM

better than peers and to deliver a flat YoY / up QoQ GPM.

FX losses likely remained a headwind in 2Q, as the RMB continued to appreciate

against the USD, although these losses represent a non-cash cost item. Fuyao Glass Industry Group (3606.HK, 3606 HK)

China Autos & Shared Mobility | China

We expect the fire at Fuyao's Ohio plant in late March to have negatively affected

Stock Rating Equal-weight

its 2Q US operating profit, although insurance coverage should partially offset Industry View In-Line

Price target HK$53.50

this impact.

Up/downside to price target (%) (1)

Shr price, close (Jul 6, 2026) HK$54.30

52-Week Range HK$86.00-47.70

Sh out, dil, curr (mn) 607

Mkt cap, curr (mn) Rmb136,268.4

EV, curr (mn) Rmb129,989.7

Avg daily trading value (mn) HK$163

Fiscal Year Ending 12/25 12/26e 12/27e 12/28e

EPS (Rmb)** 3.57 3.78 4.53 5.23

Prior EPS (Rmb)** - - - -

EPS (Rmb)§ 3.66 3.96 4.65 5.30

Revenue, net (Rmb mn) 45,787.451,621.959,194.866,985.4

EBITDA (Rmb mn) 13,164.414,547.117,136.919,394.8

ModelWare net inc 9,312.3 9,871.211,821.613,653.7

(Rmb mn)

P/E 16.9 12.4 10.4 9.0

P/BV 4.2 3.0 2.6 2.4