Summary of AGC (OTCPK:ASGL.Y) ESG Briefing - September 26, 2025 Company Overview - **Company**: AGC (Asahi Glass Company) - **Industry**: Glass and Chemicals - **Global Presence**: Operations in over 30 countries with approximately 54,000 employees [5][4] Key Business Segments - **Sales Breakdown**: - Glass-related business: 45% - Chemicals: 25% - Electronics: 20% - Life Science and Ceramics: 10% each [4][3] Value Creation Model - **Purpose**: AGC aims to be an essential part of everyday life, focusing on long-term social issues and materiality [15][13] - **Management Strategy**: The company emphasizes a value creation model that connects external environmental changes with its purpose [15][22] - **Social Values**: Focus on sustainable global environment, innovation, and well-being [21][22] Sustainability and Innovation - **Sustainability Objectives**: Addressing climate change and resource efficiency while maximizing opportunities through products and technologies [17][18] - **Technological Advancements**: Emphasis on developing unique materials and solutions to solve social issues [21][24] - **Carbon Neutrality Goal**: AGC aims to achieve carbon neutrality by 2050 through various technologies, including recycling and alternative fuels [32][34] Intellectual and Human Capital - **Intellectual Capital**: Focus on evolving technologies, particularly in organics and glass, with a strategic approach to patent applications [24][42] - **Human Capital Development**: Initiatives to enhance employee engagement and develop future management talent, including a focus on diversity [46][49][81] Research and Development Focus - **Key Technology Fields**: Seven identified fields for future growth, including performance chemicals and mobility solutions [29][71] - **Open Innovation**: Collaboration with external partners and academia to accelerate product development [40][41] Financial Performance and Licensing - **Patent Growth**: Increase in patent applications and licensing revenue, particularly in strategic business areas like electronics and life sciences [72][74] - **Revenue Generation**: More than half of revenue is expected to come from strategic businesses [74] Challenges and Future Outlook - **Management Development**: Continuous efforts to enhance the talent pool, including female and non-Japanese candidates, are ongoing [81][79] - **Market Adaptation**: AGC is adapting to technological changes and market demands, particularly in automotive and energy sectors [71][70] Conclusion - AGC is committed to sustainability, innovation, and enhancing its value creation model while focusing on human capital development and strategic growth areas. The company aims to leverage its strengths in glass and chemicals to meet future challenges and opportunities in the market [91][90]

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].