Citi: Lowered the target price of XINYI GLASS (00868) to HKD 10.3. Mid-term performance exceeded expectations, but cost pressures increase in the second half.

Citibank released a research report stating that XINYI GLASS (00868) exceeded market expectations in terms of revenue, gross margin, and net profit in the first half of the year. However, the bank anticipates that cost pressures will be more significant in the second half of the year, thus lowering its target price from HKD 11.7 to HKD 10.3 while maintaining a "neutral" rating. The report mentioned that XINYI GLASS's revenue fell 3% year-on-year, which is 2% higher than market expectations; the gross margin was 30.1%, down 1.5 percentage points year-on-year, but 1.2 percentage points higher than market forecasts; the net profit increased by 17% year-on-year, exceeding market expectations by 18%. In response to a decline in capital expenditure, the bank raised its net profit forecast for the company for this year by 1%, but reduced the forecasts for 2027-28 by 2% to reflect the gross margin pressure starting in the second half of this year.