Core Viewpoint - Fuyao is expected to achieve significant revenue growth and improved profitability in 2Q25, driven by various factors including better scale effects, reduced OEM rebate pressure, and cost savings from raw material and shipping cost deflation [1][2][3]. Revenue Growth - 2Q25 revenue is projected to grow by 13-14% YoY, reaching RMB10.7-10.8 billion, with domestic automotive glass revenue expected to rise over 15% YoY [2][3]. - Overseas auto glass sales are anticipated to see double-digit YoY growth, supported by increased production capacity at the US second-phase plant and steady export demand to Europe [2][3]. Profitability and Margins - Gross margin for 2Q25 is expected to expand by over 1 percentage point from 35.4% in 1Q25, aided by improved operational efficiencies and cost savings [1][2]. - The company is projected to achieve net income of RMB2.5-2.6 billion in 2Q25, marking another quarterly high, with FX gains estimated at over RMB300 million due to the Euro's appreciation against the RMB [1][3]. Overseas Operations - US manufacturing profitability is expected to improve, with the first-phase plant's capacity utilization and operational efficiency enhancing overall profitability [3]. - The second-phase plant is on track to narrow its losses compared to 2H24, with full-year operating margin expected to exceed the original target of 13% [3]. Strategic Positioning - Fuyao is leading among Chinese auto parts suppliers in expanding its global footprint, particularly in the US market, by leveraging local capacity and export supply [4]. - The company's flexible capacity allocation strategy amid tariff uncertainties enhances its operational resilience and risk resistance in a challenging geopolitical environment [4]. Valuation and Market Position - Fuyao's H-shares are currently trading at 16x 2025 P/E, which is considered undemanding, especially compared to peers like Nexteer and Minth [5]. - The anticipated solid operating performance in 2Q25 is expected to act as a catalyst for reversing the company's lagging stock price performance year-to-date [5].