UBS Fuyao Glass (600660): Positive Q1 2026 Earnings Growth; GPM a Notable Beat
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UBS reviewed Fuyao Glass A-share (600660) first-quarter 2026 results, highlighting positive revenue and earnings momentum despite challenging automotive markets. Even as Chinese passenger vehicle production fell 10 percent and US sales dropped 6 percent, Fuyao grew revenue 5.1 percent to 10.41 billion yuan. Growth stemmed from an estimated 11 percent rise in automotive glass average selling prices and global market share expansion.
Reported net income fell 15.7 percent to 1.71 billion yuan due to foreign exchange losses of 440 million yuan, compared to a 240 million yuan gain in early 2025. However, excluding foreign exchange impacts, pre-tax profit increased 10 percent year over year. The standout metric was the gross margin, which expanded 2 percentage points year over year to 37.4 percent, beating expectations. This expansion was driven by an 18 percent decline in soda ash prices, improved product mix, higher utilization at the US phase two facility, and controlled energy and raw material costs.
UBS maintains a Buy rating with a target price of 93.00 yuan based on a discounted cash flow model using a 9 percent WACC. The firm highlights that the stock trades at merely 12 times 2027 estimated earnings, sitting at a five-year low. Potential upside catalysts include continued recovery momentum in the Chinese auto market and sustained quarterly earnings outperformance, alongside accelerated European market share gains as regional competitors face energy cost pressures.