Group 1 - Goldman Sachs is optimistic about Sunny Optical Technology's product portfolio upgrade, believing that automotive and smartphone lenses will drive the company's performance growth [1] - It is expected that Sunny Optical's revenue in the second half of the year will increase by 11% year-on-year, and the earnings forecast for the fiscal years 2025-2027 has been raised by 4%, while the operating expense ratio for the same period has been lowered [1] - Goldman Sachs has raised the target price for Sunny Optical's H-shares to HKD 80.1, maintaining a "Neutral" rating [1]

Core Insights - The smartphone market is recovering, leading to rapid revenue growth for the company [1] - The company reported a gross profit of approximately RMB 3.247 billion in the first half of 2024, an increase of about 52.4% compared to the same period last year [2] - The company is continuously increasing R&D investment in automotive and XR-related businesses [3][17] - Strong growth in optical component shipments has been observed [4] - The company is focusing on emerging optical businesses, leveraging AI technology to enhance the XR industry [5] - In the automotive module business, the company is deepening ecosystem cooperation with major platform providers like Mobileye, Horizon, Qualcomm, and NVIDIA [6] - Profitability of mobile lenses and camera modules has improved [7] - The gross margin is approximately 17.2%, an increase of about 2.3 percentage points compared to the same period last year [8] - R&D expenditure for the first half of 2024 was approximately RMB 1.468 billion, a year-on-year increase of about 21.9%, accounting for about 7.8% of the company's revenue [9] - The company is exploring market opportunities in the automotive optical field, focusing on lidar, heads-up displays (HUD), and smart car lights [10] - The company is deepening ecosystem cooperation in optoelectronic products [11] - The shipment volume of automotive lenses increased by approximately 13.1% year-on-year in the first half of 2024 [12] - The shipment volume of mobile lenses rose by approximately 23.7% year-on-year to 634,401,000 units [13] - The company achieved revenue of approximately RMB 18.86 billion in the first half of 2024, an increase of about 32.1% compared to the same period last year [15] - The company is focusing on industrial smart equipment, medical equipment, and emerging market equipment in the intelligent detection equipment business [16]

Investment Rating - The report assigns a "Buy" rating for the company, indicating an expected relative increase in stock price of over 20% compared to the benchmark index within six months [21][31]. Core Insights - The company has solidified its leading position in the ADAS (Advanced Driver Assistance Systems) market by developing innovative products such as heated ADAS vehicle lenses and 300-megapixel side-view glass-plastic hybrid lenses, which significantly reduce costs [4]. - The smartphone market is recovering, leading to a rapid increase in revenue, with a reported revenue of approximately RMB 188.60 billion for the first half of 2024, a year-on-year increase of about 32.1% [20]. - The company has made significant advancements in optical instruments, including the development of a high-performance 40X water immersion objective lens, enhancing its capabilities in life sciences applications [12][20]. Summary by Sections Company Overview - The company is a leader in optical technology, focusing on automotive, smartphone, and XR (Extended Reality) markets, with a total market capitalization of RMB 726 billion [19][28]. Financial Performance - For the first half of 2024, the company reported a net profit of approximately RMB 11.11 billion, a year-on-year increase of about 142.0%, with a net profit margin of 5.9% [20]. - The gross profit for the same period was approximately RMB 32.47 billion, reflecting a gross margin of 17.2%, an increase of 2.3 percentage points from the previous year [20]. Market Position - The company continues to hold the largest market share in smartphone camera modules, with a shipment volume of approximately 634.4 million units, representing a year-on-year increase of about 23.7% [4]. - In the automotive lens sector, the company achieved a shipment volume increase of approximately 13.1% to 53.23 million units in the first half of 2024 [20]. Research and Development - The company has increased its R&D expenditure to approximately RMB 14.68 billion, accounting for 7.8% of its revenue, focusing on automotive and XR-related business innovations [20]. - The company has successfully developed multiple high-end optical products, including a one-inch main camera lens and various periscope camera modules, enhancing its competitive edge in high-value products [12][20].

Group 1 - Goldman Sachs has raised the target price for Sunny Optical Technology by 5.2% to HKD 66.8 and maintains a "Neutral" rating [1] - The report mentions adjustments to the company's earnings forecasts, gross margin, and operating expense ratio for 2024-2026 based on November shipment data [1] Group 2 - Despite weak shipment volumes for mobile camera lenses and modules, there has been a year-on-year increase in shipments of automotive lenses [2]

Investment Rating - The report maintains a "Buy" rating for the company [2][3]. Core Views - The company reported a significant revenue increase of 32.1% year-over-year, achieving 18.86 billion RMB in the first half of 2024, driven by a recovery in the smartphone market and growth in automotive and VR business segments [3]. - The gross profit reached 3.25 billion RMB, reflecting a 52.4% year-over-year increase, while net profit surged by 142.0% to 1.11 billion RMB, exceeding market expectations [3]. - The smartphone segment is expected to benefit from the demand recovery and product structure improvement, with a projected smartphone shipment of 1.24 billion units in 2024 [3]. - The automotive business is also on an upward trajectory, with a forecasted global shipment of 340 million automotive cameras in 2024, representing a 30.8% year-over-year growth [3]. - The XR business is gaining traction, with anticipated annual sales of over 2 million units for AI glasses, indicating a growing market for AR applications [3]. - The company is projected to achieve revenues of 38.2 billion RMB, 44.2 billion RMB, and 48.3 billion RMB for the years 2024, 2025, and 2026 respectively, with net profits expected to reach 2.54 billion RMB, 3.25 billion RMB, and 3.65 billion RMB in the same years [3]. Summary by Sections Financial Performance - The company reported a revenue of 18.86 billion RMB for the first half of 2024, a 32.1% increase year-over-year, surpassing the consensus estimate of 17.22 billion RMB [3]. - The net profit for the same period was 1.11 billion RMB, a 142.0% increase year-over-year, exceeding the expected 1.03 billion RMB [3]. - The gross margin improved significantly, reflecting better profitability in smartphone camera modules [3]. Business Segments - **Smartphone Business**: The company saw a recovery in smartphone demand, with a shipment of 1.108 billion camera lenses, a 17.1% increase year-over-year, and a slight decline in camera module shipments [3]. - **Automotive Business**: The company shipped 88.5 million automotive lenses in the first ten months of 2024, a growth of 11.6% year-over-year, with expectations for continued growth in the coming years [3]. - **XR Business**: The company is positioned as a supplier for AI glasses, with significant sales growth anticipated in the AR market [3]. Future Outlook - The company is expected to benefit from trends in AI smartphones and high-end product demand, with a positive outlook for its automotive and XR segments [3]. - Revenue projections for 2024-2026 indicate strong growth, with net profit margins expected to improve [3].

Investment Rating - The investment rating for Sunny Optical is maintained at Neutral with a 12-month target price of HK$63.50, based on a P/E multiple of 23.3x for 2025E [6][9]. Core Insights - Sunny Optical's September shipments showed a year-on-year increase of 6% for handset lenses, while camera module shipments decreased by 30% year-on-year. Vehicle lens shipments increased by 13% year-on-year [1][2]. - The company is expected to improve its gross margin (GM) to 17.5% in the second half of 2024, up from 14.1% in the second half of 2023 and 17.2% in the first half of 2024, driven by product mix upgrades towards mid and high-end smartphone projects [1][4]. - The overall shipment performance for the first nine months of 2024 is largely in line with estimates, with handset lens shipments tracking 77% of the 2024 estimates, vehicle lens at 78%, and camera modules at 74% [2][4]. Shipment Performance Summary - Handset lens shipments in September were 119 million units, a decrease of 4% month-on-month but an increase of 6% year-on-year, leading to a total of 993 million units for the first nine months of 2024, representing a 20% year-on-year growth [2][4]. - Camera module shipments were 37 million units in September, down 30% year-on-year, with a total of 409 million units for the first nine months of 2024, reflecting a 3% year-on-year increase [4]. - Vehicle lens shipments reached 9 million units in September, up 13% year-on-year, contributing to a total of 80 million units for the first nine months of 2024 [2][4]. Financial Projections - Revenue projections for Sunny Optical are estimated to reach RMB 37.63 billion in 2024, with an expected increase to RMB 45.36 billion in 2025 and RMB 53.74 billion in 2026 [9]. - The earnings per share (EPS) is projected to be RMB 2.08 in 2024, increasing to RMB 2.56 in 2025 and RMB 3.24 in 2026 [9].

Key Points - **Industry/Company Involved**: Consumer electronics sector, Shunyu Optics - **Core Viewpoints and Arguments**: - The consumer electronics sector has shown significant improvement in fundamentals since last quarter of the previous year. - Shunyu Optics is being recommended as a company within this sector. - **Other Important Content**: - No additional information provided in the excerpt. [1]

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 57.3, indicating a potential upside of 31.65% from the current price of HKD 43.5 [1][3]. Core Insights - The company has shown significant improvement in profitability, with a revenue increase of 32.1% year-on-year to HKD 188.6 billion for the first half of 2024, and a net profit increase of 147.1% to HKD 10.8 billion [2][3]. - The mobile phone industry is experiencing a recovery in demand, and the company's product mix is continuously optimizing, leading to a forecasted increase in mobile lens shipments by 5-10% year-on-year [2][3]. - The automotive and AR/VR sectors are also expanding, with automotive revenue growing by 16.4% to HKD 28.8 billion and AR/VR revenue skyrocketing by 111.4% to HKD 9.9 billion [2][3]. Financial Summary - Revenue projections for 2024, 2025, and 2026 are HKD 383.9 billion, HKD 437.8 billion, and HKD 478.8 billion respectively, with net profits expected to be HKD 22.7 billion, HKD 28.7 billion, and HKD 33.4 billion [3][5]. - The company maintains a gross margin of 17.2%, which is an increase of approximately 2.3 percentage points compared to the previous year, with operational expenses kept below 12% [2][5]. - The company has a market capitalization of HKD 476.24 billion and a share capital of 1.095 billion shares [4].

Financial Performance - Revenue for the first half of 2024 was RMB 18,860.2 million, a year-on-year increase of 32.1%[6] - Gross profit for the first half of 2024 was RMB 3,246.5 million, a year-on-year increase of 52.4%[6] - Gross profit margin increased by 2.3 percentage points year-on-year to 17.2%[7] - Net profit for the first half of 2024 was RMB 1,111.5 million, a year-on-year increase of 142.0%[7] - Net profit margin increased by 2.7 percentage points year-on-year to 5.9%[8] - Basic earnings per share increased by 147.7% year-on-year to RMB 99.0 cents[8] - Revenue for the six months ended June 30, 2024, was approximately RMB 18,860,200,000, a 32.1% increase year-over-year, driven by growth in smartphone, vehicle, and VR-related products[28] - Gross profit increased by 52.4% to RMB 3,246,500,000, with a gross profit margin of 17.2%, up 2.3 percentage points, primarily due to improved margins in handset lens sets and camera modules[30] - Net profit surged by 142.0% to RMB 1,111,500,000, with a net profit margin of 5.9%, up from 3.2% in the prior year, driven by profitability improvements in handset lens sets and camera modules[36] - Revenue for H1 2024 increased by 32.1% to RMB18,860.2 million, driven by growth in handset lens sets, handset camera modules, and VR-related products[25] - Revenue for the six months ended 30 June 2024 increased to RMB 18,860,225,000, up 32.1% from RMB 14,278,565,000 in the same period in 2023[139] - Gross profit rose to RMB 3,246,479,000, a 52.4% increase compared to RMB 2,130,588,000 in 2023[139] - Profit for the period surged to RMB 1,111,528,000, marking a 142.0% growth from RMB 459,391,000 in 2023[139] - Earnings per share (basic) increased to RMB 99.04 cents, up 147.7% from RMB 39.99 cents in 2023[141] - Total comprehensive income for the period reached RMB 1,070,438,000, a 141.6% increase from RMB 442,877,000 in 2023[139] - Profit for the period reached RMB 1,079,006 thousand, contributing to a total comprehensive income of RMB 1,044,093 thousand for the six months ended 30 June 2024[147] - Profit before tax for the six months ended 30 June 2024 increased to RMB 1,248,701 thousand, up from RMB 591,876 thousand in the same period in 2023[153] - Earnings for the purposes of basic and diluted earnings per share were RMB 1,079,006 for the six months ended June 30, 2024, compared to RMB 436,714 in the same period in 2023[200] Market and Industry Trends - Global smartphone shipment volume in the first half of 2024 was approximately 574.8 million units, a year-on-year increase of 7.1%[12] - China's automobile market production and sales volume increased by approximately 4.9% and 6.1% year-on-year, respectively, with new energy vehicle production and sales volume increasing by approximately 30.1% and 32.0% year-on-year, respectively[11] - The XR market faced challenges in the first half of 2024, but AR products integrated with AI showed stronger growth potential than VR products[11] - Global smartphone shipments increased by 7.1% YoY to 574.8 million units in the first half of 2024, driven by demand for high-end models and AI integration[13] Product and Technology Development - The company's vehicle lens sets shipments grew by 13.1% YoY to 53.234 million units, with advancements in ADAS technology including heated lenses and 3-megapixel glass-plastic hybrid designs[16][17] - Handset lens sets shipments rose by 23.7% YoY to 634.401 million units, maintaining the company's global No. 1 market share position[20] - The company completed R&D for long-distance LiDAR modules and all-solid-state gap filler LiDAR platform products, achieving technological breakthroughs in mass-production equipment[18] - In the HUD sector, the company's self-developed optical engine (PGU) secured a domestic customer project, with mass production expected in the second half of 2024[18] - The company achieved mass production of 1-inch glass-plastic hybrid handset lens sets for main cameras, leading the industry in large image size technology[20] - Multiple periscope handset lens sets with large image size were mass-produced, maintaining high-resolution image quality for super remote distance shooting[20] - The company completed R&D for multi-group periscope handset lens sets, integrating close-up and distant shooting functions[20] - In the XR industry, the company deepened collaboration with global manufacturers, driving the definition and mass production of differentiated display and sensing optical products[19] - The Group achieved mass production of 1-inch main camera long-stroke guide rod actuators and dual-group internal focusing periscope handset camera modules[22] - The Group's 8-megapixel vehicle modules maintained global No. 1 market share and secured a core project with a leading European automobile manufacturer[21] - The Group completed R&D of 200-megapixel periscope handset camera modules with self-developed actuators and multi-fold prisms[22] - The Group's fifth-generation handset lens post-processing inspection line achieved over 50% efficiency improvement compared to the previous generation[23] - The Group successfully developed a 40X water immersion objective lens with wide-bandwidth, flat-field, and large numerical aperture for advanced microscopy applications[24] - The Group's robot navigation and AI recognition camera modules achieved mass production and shipment to mainstream consumer-grade robot customers[22] - The Group's miniaturized monochrome and color MicroLed optical engines achieved mass production, enhancing its position in the XR industry[21] - The company completed the development of the fifth-generation smartphone lens post-inspection line, improving efficiency by over 50% and integrating advanced AI and optical systems[27] Operational and Financial Metrics - R&D expenditure increased by 21.9% to RMB 1,468,400,000, accounting for 7.8% of revenue, with increased investment in vehicle and XR-related businesses[33] - Optical Components business revenue grew by 26.9% to RMB 5,480,400,000, driven by increased sales of handset lenses, vehicle lenses, and VR-related products[28] - Optoelectronic Products business revenue rose by 35.5% to RMB 13,191,100,000, primarily due to growth in handset camera modules and vehicle modules[29] - Optical Instruments business revenue decreased by 15.8% to RMB 188,700,000, reflecting challenges in this segment[29] - Selling and distribution expenses decreased by 5.8% to RMB 226,100,000, accounting for 1.2% of revenue, due to stricter control over marketing-related expenses[31] - Administrative expenses increased by 23.0% to RMB 563,500,000, driven by higher staff remuneration and increased spending on informationization construction[35] - Net profit attributable to shareholders increased by 147.1% to RMB 1,079,000,000 for the six months ended June 30, 2024[40] - Net cash from operating activities increased to RMB 2,067.9 million, up from RMB 1,053.6 million in the same period last year[43] - Total assets decreased by 3.5% to RMB 48,539.2 million as of June 30, 2024, compared to December 31, 2023[44] - Current ratio improved to 1.8 times as of June 30, 2024, from 1.7 times at the end of 2023[44] - Cash and cash equivalents decreased to RMB 9,603.2 million as of June 30, 2024, from RMB 13,084.5 million at the end of 2023[45] - Capital expenditure for the six months ended June 30, 2024, amounted to RMB 1,045.8 million, primarily for property, plant, and equipment[45] - Gearing ratio increased to 12.1% as of June 30, 2024, from 11.1% at the end of 2023[46] - Available banking facilities as of June 30, 2024, included RMB 30,933.79 million, USD 635.0 million, and INR 4,500.0 million[45] - Capital commitments for property, plant, and equipment amounted to RMB 752.0 million as of June 30, 2024[47] - Capital commitments for property, plant, and equipment as of June 30, 2024, amounted to approximately RMB 752 million, up from RMB 690.8 million as of December 31, 2023[51] - The Group's portfolio of unlisted financial products had a total carrying amount of approximately RMB 8,407.7 million as of June 30, 2024, representing 17.3% of total assets, up from 14.1% as of December 31, 2023[53] - Investment income from unlisted financial products at fair value through profit or loss (FVTPL) for the six months ended June 30, 2024, was approximately RMB 141.4 million, down from RMB 227.8 million in the corresponding period last year[53] - The Group invested approximately RMB 1,045.8 million in the first half of 2024, primarily for the purchase of property, plant, and equipment to enhance R&D, technological application capabilities, and production efficiency[57] - The fair value of the top unlisted financial products as of June 30, 2024, included RMB 380 million for Agricultural Bank wealth management (0.8% of total assets) and RMB 322.15 million for Sunshine Jin Zhou Tian Li Zhen Xiang (0.7% of total assets)[55] - The Group plans to diversify investments among different banks to lower concentration risk and closely monitor investment performance to increase the yield of idle funds while maintaining high liquidity and low risk[58] - The average fair value of 51 unlisted financial products with 10 different banks as of June 30, 2024, was approximately RMB 134.9 million, aimed at reducing concentration risk[56] - The Group will rely on internal resources, bank borrowings, or debt financing to meet future material investment or capital asset acquisition needs[58] - The effective interest rate on fixed-rate bank borrowings was 2.25% to 3.97% per annum, while the effective interest rate of variable-rate bank borrowings was 4.80% per annum as of 30 June 2024[60] - Property, plant and equipment stood at RMB 9,945,391,000 as of 30 June 2024, slightly up from RMB 9,927,315,000 at the end of 2023[143] - Inventories decreased to RMB 4,731,417,000 as of 30 June 2024, down 7.9% from RMB 5,136,941,000 at the end of 2023[143] - Cash and cash equivalents declined to RMB 9,603,152,000 as of 30 June 2024, a 26.6% decrease from RMB 13,084,519,000 at the end of 2023[143] - Research and development expenditure increased to RMB 1,468,369,000, up 21.9% from RMB 1,204,802,000 in 2023[139] - Selling and distribution expenses rose to RMB 226,073,000, a 5.8% increase from RMB 240,092,000 in 2023[139] - Net current assets increased to RMB 14,413,062 thousand as of 30 June 2024, up from RMB 13,857,329 thousand at the end of 2023[145] - Total equity rose to RMB 23,640,620 thousand as of 30 June 2024, compared to RMB 22,881,630 thousand at the end of 2023[145] - Bank borrowings under current liabilities increased to RMB 1,185,565 thousand as of 30 June 2024, up from RMB 699,000 thousand at the end of 2023[145] - Trade and other payables decreased to RMB 17,497,538 thousand as of 30 June 2024, down from RMB 20,324,883 thousand at the end of 2023[145] - Bonds payable under current liabilities were recorded at RMB 77,270 thousand as of 30 June 2024, compared to none at the end of 2023[145] - Non-controlling interests increased to RMB 490,508 thousand as of 30 June 2024, up from RMB 458,663 thousand at the end of 2023[145] - Retained profits stood at RMB 22,062,067 thousand as of 31 December 2023, contributing to the overall equity growth[147] - Total assets less current liabilities were RMB 29,474,638 thousand as of 30 June 2024, slightly higher than RMB 29,010,445 thousand at the end of 2023[145] - Other comprehensive expense for the period was RMB 34,913 thousand, impacting the total comprehensive income[147] - Depreciation of property, plant, and equipment for the six months ended 30 June 2024 was RMB 1,059,082 thousand, compared to RMB 977,141 thousand in 2023[153] - Net cash from operating activities for the six months ended 30 June 2024 was RMB 2,067,872 thousand, up from RMB 1,053,642 thousand in 2023[155] - Purchase of unlisted financial products for the six months ended 30 June 2024 amounted to RMB 19,280,400 thousand, compared to RMB 4,818,100 thousand in 2023[155] - Redemption of unlisted financial products for the six months ended 30 June 2024 was RMB 17,988,100 thousand, up from RMB 6,840,000 thousand in 2023[155] - Placement of short term fixed deposits for the six months ended 30 June 2024 was RMB 3,469,453 thousand, compared to RMB 1,264,515 thousand in 2023[155] - Release of short term fixed deposits for the six months ended 30 June 2024 was RMB 2,929,831 thousand, up from RMB 489,024 thousand in 2023[155] - Purchase of property, plant, and equipment for the six months ended 30 June 2024 was RMB 637,850 thousand, compared to RMB 607,113 thousand in 2023[155] - Deposits and prepayment paid for acquisition of property, plant, and equipment for the six months ended 30 June 2024 was RMB 407,990 thousand, compared to RMB 411,739 thousand in 2023[155] - Proceeds from disposal of property, plant, and equipment for the six months ended 30 June 2024 was RMB 3,673 thousand, down from RMB 12,831 thousand in 2023[155] - Net cash used in investing activities increased to RMB 2,562,561 thousand in 2024 from RMB 1,379,775 thousand in 2023, reflecting higher investment outflows[157] - New bank borrowings raised in 2024 amounted to RMB 7,532,560 thousand, a significant increase from RMB 4,463,023 thousand in 2023[157] - Net cash used in financing activities was RMB 2,990,449 thousand in 2024, compared to net cash from financing activities of RMB 4,449,252 thousand in 2023[157] - Cash and cash equivalents decreased by RMB 3,485,138 thousand in 2024, contrasting with an increase of RMB 4,123,119 thousand in 2023[157] - The company repaid RMB 7,246,896 thousand in bank borrowings in 2024, up from RMB 3,884,221 thousand in 2023[157] - Proceeds from notes financing in 2024 were RMB 6,505,001 thousand, slightly higher than RMB 6,183,300 thousand in 2023[157] - Dividends paid in 2024 decreased to RMB 217,731 thousand from RMB 503,311 thousand in 2023[157] - Cash and cash equivalents at 30 June 2024 stood at RMB 9,603,152 thousand, down from RMB 11,169,963 thousand at the same period in 2023[157] - Total revenue for the six months ended 30 June 2024 reached RMB 18,860,225 thousand, a 32.1% increase compared to RMB 14,278,565 thousand in the same period of 2023[163][164] - Handset-related products revenue grew by 34.5% to RMB 13,028,791 thousand in 2024 from RMB 9,688,562 thousand in 2023[163] - Vehicle-related products revenue increased by 16.4% to RMB 2,877,099 thousand in 2024 from RMB 2,471,131 thousand in 2023[163] - Augmented reality/virtual reality related products revenue surged by 111.4% to RMB 992,148 thousand in 2024 from RMB 469,428 thousand in 2023[163] - China market revenue accounted for 75.3% of total revenue, reaching RMB 14,201,236 thousand in 2024, a 57.5% increase from RMB 9,017,805 thousand in 2023[165] - Optoelectronic Products segment contributed 69.9% of total revenue with RMB 13,191,126 thousand in external sales for 2024[171] - Segment profit increased by 99.9% to RMB 1,554,118 thousand in 2024 from RMB 777,482 thousand in 2023[171][181] - Total segment assets grew

Investment Rating - The report maintains a "Buy" rating for Sunny Optical Technology (2382.HK) with a target price of HKD 57.0, indicating a potential upside of 20% [1]. Core Views - The report highlights a solid recovery in the smartphone business driven by a resurgence in demand, improved camera specifications, and a more favorable competitive landscape, which is expected to lead to a strong profit recovery [1]. - The automotive business is projected to provide stable growth, while the XR business is anticipated to return to a growth trend, contributing to an optimistic outlook for the next two years [1]. - The report forecasts a 112% year-on-year increase in net profit for the current year, supported by a low base effect [1]. Summary by Sections Smartphone Business - Expected stable shipment volume for camera modules this year, with average selling prices increasing by 10%-15% year-on-year and gross margins improving to 6%-10% in the second half of the year [1]. - Anticipated 5%-10% year-on-year growth in smartphone lens shipments, with gross margins expected to improve from 20% to 20%-25% [1]. Automotive Business - Projected 10%-15% year-on-year growth in automotive lens shipments, with stable gross margins around 40% [1]. - The company has a backlog of orders worth RMB 10 billion for automotive modules, with expected revenue of RMB 2 billion for the year [1]. XR Business - The revenue growth forecast for the XR business has been raised to 25% for the year [1]. Valuation - The report employs a sum-of-the-parts valuation method, assigning target P/E ratios of 17x for smartphone camera modules, 17x for smartphone lenses, 36x for automotive lenses, and 25x for other businesses, leading to a target price of HKD 57.0 [1].