1Q22: Earnings Up 2% yoy And 58% qoq, Missing Estimates On Forex Loss
FYG’s 1Q22 net profit came in below estimates at Rmb871m (+1.9% yoy/+58.3% qoq),
due to the unexpected Rmb134.89m in exchange losses. Gross margin spiked by
12.2ppt qoq, with the surge in ASP more than offsetting increase in sodium carbonate
cost. FYSAM’s loss narrowed 23% qoq in 1Q22. Looking ahead, the prospective drop in
sodium carbonate prices will boost margins. We maintain 2022-24 earnings estimates.
Maintain BUY. Target price: HK$45.00.