福莱特玻璃(6865 HK/601865 CH)：第三季度业绩超预期，风险/回报仍具吸引力

EquitiesElectric Utilities attractive China ◆3Q25 resultsbeat on destocking at higher-than-expectedASP, overseas sales,and ongoing optimizationof costs H: MAINTAIN BUY TARGET PRICE(HKD)PREVIOUS TARGET(HKD)14.5014.30 ◆Visibility on solar demand isstill low,butbetter supplydisciplinecouldprovide supportto pricing ◆Reiterate Buy ratings on H/A shares; TPslifted toHKD14.50/RMB23.70(fromHKD14.30/RMB23.40) 3Q25 resultsbeat:Flat Glass (FGG) reported9M25 net profit of RMB638m (-51%y-o-y) under PRC GAAP, and implied earnings for3Q25 would be RMB376m (+139%q-o-q), beatingtheconsensus and our estimates.Results weremainlydriven by:1)destocking in3Q25whilerealized ASPwaslargelystablecompared to 2Q25according to FGG;2)overseas shipmentsat higher marginswhich accounted formorethan30% of sales mix in 3Q25 (1H25:30%;1H24: 23%);3) drop in raw materialpricesand cost savingsthroughincreasing self-sufficiency of soda ashsupplies(currently 80%), product formula optimization,and technical upgrades;and4)reversals of inventory impairments of RMB82m in 3Q25 as market price rebounded. A: MAINTAIN BUY TARGET PRICE(CNY)PREVIOUS TARGET(CNY)23.7023.40SHARE PRICE(CNY)UPSIDE/DOWNSIDE16.71+41.8% Destockingis over, what’s next? Solar glass industryinventorieshaveincreasedsince Octoberdue to weak demand at downstream module companies, addinguncertainties to pricingand profitabilityin4Q25.Visibilityon China solar demand isstill low for 2026,butFGG expects overallglobaldemandto be flattish or improvingy-o-yowingto strength in emerging markets.We see better visibility on the supplyside,with overall supply down15% y-o-y globallyand limited progressfornewplants.Going forward, webelievethe industry’sbetter discipline inaddingnewsupplies andChina’spolicies in anti-involution could create upside risks to pricing, and wecontinue to like FGG for its cost leadership. Valuation looksundemanding at 2026ePE/PB of17.1x/1.0x for FGG-H. Werevise our earningsestimatespost 3Q25 resultsand roll forward the base year of our DCF valuation to 2026. OurTPs for FGG-H/Aare lifted toHKD14.50/RMB23.70(fromHKD14.30/RMB23.40). Evan Li*Head, Asia Energy Transition ResearchThe Hongkong and Shanghai Banking Corporation Limitedevan.m.h.li@hsbc.com.hk+852 2996 6619 Key takes of 3Q25 results Shayla Xu*Associate, Asia Energy TransitionThe Hongkong and Shanghai Banking Corporation Limitedshayla.b.xu@hsbc.com.hk+852 2288 7378 ◆Company GPMfurther improved to 16.8% in 3Q25 (2Q25: 16.6%; 3Q24: 6.0%).FGG mentioned thatshipmentsin Septemberwereparticularlystrong whentheASPwas+18%m-o-minChina,whichexplained why its realized ASP was largely flattishin 3Q25 compared to 2Q25. * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and isnot registered/ qualified pursuant to FINRA regulations ◆Solar glass capacity:FGG’scapacity under operation was 16,400 tonnes per day(tpd) as of the end ofSep2025, with6,600tpd under cold maintenance.Newplantsin Anhui and Nantongareready for ignition,but FGGawaits better visibility ondemand.Newplantin Indonesiais expectedto come online by2H27. Bulls on the march The 21stedition of the EM Sentiment Survey ◆Inventory level:Afterrapiddestocking in 3Q25, FGG’s inventory has dropped toless thantendays by end of September(industryaverage: 15 days). Click to view Issuer of report:The Hongkong and ShanghaiBanking Corporation Limited Disclosures & DisclaimerThis report must be read with the disclosures and the analystcertifications in the Disclosure appendix, and with the Disclaimer, which forms part of it. View HSBC Global Investment Research at:https://www.research.hsbc.com Financials & valuation 3Q25results review Estimates revisions Change to earnings forecasts ◆We revise upourassumption for solar glass shipment volume by4% for 2025 to reflectstrongshipmentsin3Q25. ◆We revise upoursolar glass ASPestimateby2% for 2025. However, we revisedownourASP assumption by3-4% for 2026-27reflecting lack of visibility in demand.◆We revise downthesolar glass unit cost by2-4% for 2025-27 based on 9M25 actual.◆Following the above-mentioned changes, we revise up our earnings estimates by 413%/-8%/-3% for 2025/2026/2027. Changes to target price ◆We continue to use DCF valuation for Flat Glass, with a base year of 2026 (previously 2025). ◆We raise our DCF-basedtarget priceson H/A sharestoHKD14.50/RMB23.70(fromHKD14.30/RMB23.40) as we roll forward thevaluation to 2026. Valuation and risks Disclosure appendix Analyst Certification The following analyst(s), economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s)whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the coveringanalyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) orissuer(s), any views or forecasts expressed in the section(s) of which such individual(s) is(are) named as author(s), andany other