Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 9.60 [8][9]. Core Views - The company reported a revenue of RMB 22.324 billion and a net profit of RMB 3.369 billion for 2024, reflecting a year-on-year decline of 8.1% and 31.0% respectively, primarily due to a significant drop in float glass prices in the second half of 2024 [1][5]. - The float glass segment experienced a revenue decline of 18.5%, while automotive glass revenue grew by 16.4%, indicating a shift in product demand [2]. - The company is positioned as an industry leader with scale and cost advantages, suggesting resilience despite current market pressures [5]. Revenue and Profitability - For 2024, the company achieved revenues of RMB 129.1 billion from float glass, RMB 63.0 billion from automotive glass, and RMB 31.1 billion from architectural glass, with respective year-on-year changes of -18.5%, +16.4%, and +2.4% [2]. - The gross profit margins for float glass, automotive glass, and architectural glass were 18.9%, 52.3%, and 31.8%, showing a decline for float glass and architectural glass but an increase for automotive glass [2]. Financial Management - The company successfully reduced its financial expense ratio to 0.6% by replacing higher-rate HKD loans with lower-rate RMB loans, contributing to a 23.3% increase in operating cash flow to RMB 55.9 billion [3]. - The company’s financial health is supported by effective working capital management, allowing it to maintain good cash flow during industry downturns [3]. Market Outlook - The report anticipates a gradual recovery in float glass prices as supply and demand balance out following potential industry capacity reductions [4]. - The company’s overseas revenue reached RMB 7.08 billion, a 6.0% increase year-on-year, driven by growth in automotive glass sales abroad [2]. Earnings Forecast and Valuation - The earnings per share (EPS) estimates for 2025, 2026, and 2027 are projected at RMB 0.72, RMB 0.83, and RMB 0.93 respectively, reflecting downward adjustments due to the current pricing environment [5][30]. - The report assigns a price-to-earnings (PE) ratio of 12x for 2025, consistent with the average since 2021, indicating a target price of HKD 9.60 [5].