Morgan Stanley research report revealsArcadeartXinyi Glass (00868) shares rebounded 63%ArcadeartThe price-to-earnings ratio is about 10%, but the fundamentals of the industry are still downward, and product prices and profits are under pressure. Set the target price from 9Arcadeart.5 Hong Kong dollars reduced to 7Arcadeart.8 Hong Kong dollars, the rating was adjusted from "keep pace with the market" to "underweight".
[Morgan Stanley downgraded Lutheran Glass (00868) to "underweight" with a target price of HK $7.80] Xinyi Glass shares have risen 63 per cent since bottoming out on February 9, with a price-to-earnings ratio of HK $7.80 from HK $9.50. The rating has also been adjusted from "in line with the market" to "underweight". Morgan Stanley believes that despite the loosening of real estate policies, low valuations and relatively high dividend yields, the outlook for property completion is still not optimistic and valuations are relatively expensive. Industry fundamentals continue to decline, Xinyi glass product prices and profits are under pressure. Morgan Stanley predicts that while recent policy measures on the mainland are expected to boost inner housing sales, it will take a lot of money to digest the stock, and the government is expected to allocate about Rmb300 billion of destocking funds, accounting for only about 4 per cent of second-hand housing sales. In addition, policy formulation will take 6-12 months, and the policy is expected to be implemented gradually in the first half of 2025. New construction has fallen sharply in the past two years, and housing completion will continue to decline. The number of factory orders was 11 days, down from 16.5 days at the end of April 2023. Overall demand is low, and the market is cautious about the future of Xinyi Glass.