20 August 2025 Relatedly, on 15 August, the Qiushi Journal, a flagship magazine of the Communist Party of China (CCP) Central Committee, published an article by President Xi, emphasising key measures needed to promote development of the private economy. The article was based on President Xi's speech delivered in the symposium with the private sector in February (see China macro tracker, 19 Feb), which reiterated the importance of fair competition, settling local government arrears as well as protecting POE' ...

20 August 2025 Economist, China The Hongkong and Shanghai Banking Corporation Limited taylor.t.l.wang@hsbc.com.hk +852 2288 8650 China Macro Tracker Economics More measures to support growth Growth: Slower growth may prompt faster rollout of demand-side measures Despite steady growth in H1, the July economic data showed softer growth momentum across sectors: a rare month on month contraction in new bank lending with broad- based weakness seen in both household and corporate lending (see China money supply, ...

Core Viewpoint - Xinyi Glass reported a decline in revenue and net profit for 1H25, primarily due to weak demand in the float glass and architectural glass sectors, although automotive glass earnings showed resilience [1][2]. Financial Performance - Revenue for 1H25 decreased by 9.7% YoY to Rmb9.8 billion, with net profit attributable to shareholders falling 59.6% YoY to Rmb1 billion [1]. - Automotive glass revenue increased by 10.6% YoY to Rmb3.3 billion, with gross margin rising by 5.0 percentage points YoY to 54.5% [2]. - Float glass revenue dropped by 16.4% YoY to Rmb5.4 billion, with the industry average selling price (ASP) declining by 28% YoY to Rmb1,329 per ton [3]. Cost and Expenses - The firm's expense ratio increased by 2.4 percentage points YoY to 18.6%, with selling expenses rising by 1.6 percentage points YoY to 6.7%, attributed to higher US import tariffs [4]. - The effective tax rate rose by 5-6 percentage points YoY, linked to a decrease in earnings from associates [4]. Capital Expenditure and Dividends - Capital expenditure fell by 81% YoY to Rmb1 billion, primarily for investments in new industrial parks in China and Indonesia [5]. - An interim dividend of HK$0.125 per share was proposed, with a payout ratio of approximately 49% and a dividend yield of 3.3% [5]. Industry Outlook - The float glass industry is expected to adjust supply through cold repairs, with potential cost increases for highly polluting fuels possibly improving earnings [5]. - The company's focus on deep engagement in the automotive glass aftermarket and expansion into the OEM segment may provide stability to overall earnings [5]. Financial Forecasts - The 2025 EPS forecast was cut by 21% to Rmb0.52, while the 2026 EPS forecast remains at Rmb0.68, reflecting pressures on the float glass business [5]. - The target price is maintained at HK$8.5, implying a 15x 2025e and 11x 2026e P/E ratio, with a 5% upside potential [5].