XINYI GLASS(00868) 第一上海证券·2024-05-30 07:01Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 13, representing a potential upside of 32.9% from the current price of HKD 9.78 [2][4]. Core Insights - The company demonstrates strong operational resilience and continues to benefit from a marginal recovery in the real estate sector. Revenue and profit are stable, with a year-on-year revenue growth of 4.1% to HKD 26.8 billion in 2023. The gross margin slightly decreased by 1.6 percentage points to 32.1% due to high costs in the first half of the year, but improved in the second half [2][5]. - The company is expected to maintain a positive earnings trend, with projected net profits of HKD 6.6 billion, HKD 7.3 billion, and HKD 7.8 billion for 2024-2026. The company has a stable dividend payout ratio of 49% and a low net debt-to-equity ratio of 13.3% [2][6]. Financial Performance Summary - For 2023, the company's revenue from float glass, automotive glass, and architectural glass was HKD 17.5 billion, HKD 6 billion, and HKD 3.3 billion, respectively. The gross margins for these segments were 32.1%, 34.8%, and 34.8% [2][5]. - The company reported a net profit of HKD 5.4 billion for 2023, with a significant increase of 50% in the second half of the year [2][6]. - The company’s cash position is strong, with HKD 3.4 billion in cash on hand, supporting its high dividend capability [2][5]. Market Outlook - The supply-demand situation in the industry is expected to improve marginally, with a forecasted balance in the float glass market as new capacity additions slow down and maintenance activities increase. The report anticipates a stable recovery in glass prices driven by policy stimuli in the real estate sector [2][6]. - The report projects that the average price of float glass will see a slight increase in the first quarter of 2024, with expectations of stabilization and recovery in the second half of the year [2][5].