Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 60.00 [1][5][10] Core Views - The company is expected to achieve a strong recovery in profits, primarily driven by improvements in product mix, particularly in mobile camera lenses and modules, as well as growth in automotive-related businesses [2][3][4] - The forecast for net profit for 2024, 2025, and 2026 has been raised by 42%, 37%, and 38% respectively, reaching RMB 23.17 billion, RMB 27.67 billion, and RMB 33.57 billion [2][5] - The report highlights that the mobile business is projected to see a sales increase of 13% in the first half of 2024, with a significant rise in shipment volumes for mobile camera lenses and modules [3][4] Summary by Sections Financial Forecasts - Revenue for 2024 is estimated at RMB 38,433 million, with a year-on-year growth of 21.31% [1][13] - The company's net profit for 2024 is projected to be RMB 2,317 million, reflecting a significant recovery from previous years [1][13] - The report anticipates a gross margin improvement in mobile camera modules due to a better product mix and rising average selling prices [3][4] Business Segments - Mobile Business: Expected sales of RMB 110 billion in the first half of 2024, with a 24% increase in shipment volumes for mobile camera lenses and a 14% increase for modules [3] - Automotive Business: Anticipated sales growth of 22% in the first half of 2024, with total sales projected to reach RMB 64 billion for the year [4] - The report emphasizes the stability of average selling prices and gross margins in the automotive segment [4] Valuation Methodology - The target price of HKD 60 is derived using the Sum-of-the-Parts (SOTP) valuation method, corresponding to a 26x PE ratio for 2024 [5][10] - The valuation breakdown includes HKD 20.8 for automotive business, HKD 10.1 for AR/VR products, HKD 19.9 for mobile business, and HKD 9.3 for other businesses [5][10]

Investment Rating - Reiterated "Buy" rating for Sunny Optical with a target price of HKD 57.0, implying an 18% upside potential [2] Core Views - Sunny Optical is benefiting from the recovery in smartphone demand, driving growth in its core optical business [2] - The company's 1H24 profit guidance exceeded market expectations, with net profit expected to be RMB 1.048-1.092 billion, up 140-150% YoY and 58-65% QoQ [2] - Growth drivers for 2H24 and 2025 include: 1) Recovery in smartphone demand leading to higher shipment volumes, ASPs, and gross margins for camera modules and lenses [2] 2) Increasing penetration of new energy vehicles driving growth in automotive modules and lenses [2] - The target price implies 2024 and 2025 P/E multiples of 23.9x and 20.3x respectively [2] Financial Forecasts - 2024 revenue forecast raised to RMB 36.846 billion, up 16% YoY [5] - 2024 net profit forecast raised to RMB 2.416 billion, up 120% YoY [8] - 2024 gross margin forecast at 17.0%, down 1.2 percentage points from previous forecast [11] - 2024 operating margin forecast at 8.8%, up 3.0 percentage points from previous forecast [11] Valuation - Sum-of-the-parts valuation applied with target P/E multiples of: - 12x for smartphone camera modules [9] - 15x for smartphone lenses [9] - 35x for automotive lenses [9] - 20x for other businesses [9] - This results in a target price of HKD 57.0 [9] Industry Context - Sunny Optical is positioned to benefit from the recovery in smartphone demand and growth in automotive optics [2] - The company's capacity expansion has been restrained, allowing revenue growth to translate into profit growth [2] - The report also covers other technology companies including smartphone brands, automotive companies, and semiconductor firms [13]

Investment Rating - The report maintains a "Strong Buy" rating for the company with a target price of HKD 63.4 [1] Core Views - The company's expected net profit for the first half of 2024 is projected to be between HKD 1.048 billion and HKD 1.092 billion, representing a year-over-year increase of 140% to 150% [1] - The recovery in smartphone demand and improvements in product mix are key drivers for the company's strong performance in H1 2024 [1] - The global smartphone shipment volume is expected to grow by 2.8% in 2024, with the company benefiting as a leading player in the industry [1] - The rise of AI technology is anticipated to drive a new wave of smartphone upgrades, with the company positioned to benefit from this trend [1] - The company is expanding its product offerings in the AR/VR and automotive optical sectors, which are expected to contribute to future growth [1] Financial Summary - Total revenue for 2023 is reported at HKD 31.832 billion, with a projected growth of 12.1% in 2024 [5] - The company's net profit for 2023 is HKD 1.099 billion, with an expected increase to HKD 2.114 billion in 2024, reflecting a growth rate of 92.2% [5] - Earnings per share (EPS) is projected to rise from HKD 1.00 in 2023 to HKD 1.93 in 2024 [5] - The company’s price-to-earnings (P/E) ratio is expected to decrease from 44 times in 2023 to 23 times in 2024 [5]

Investment Rating - The report upgrades the investment rating of Sunny Optical to "Buy" with a target price of HK$67.88, reflecting a significant potential upside from the current price [2][8]. Core Insights - The report highlights a positive profit warning for 1H24, projecting a year-on-year profit increase of 140-150%, driven by a recovery in gross profit margin (GPM), increased iPhone market share, and the adoption of hybrid/periscope camera technologies [2]. - Adjustments to FY24 and FY25 earnings per share (EPS) estimates have been made, increasing by 46-82% due to stronger GPM and market share growth [2][5]. - The anticipated launch of AI smartphones is expected to accelerate the upgrade cycle in the second half of 2024 [2]. Financial Summary - Revenue projections for FY24E, FY25E, and FY26E are set at RMB 39,816 million, RMB 44,259 million, and RMB 48,555 million, respectively, indicating a year-on-year growth of 25.7%, 11.2%, and 9.7% [5][11]. - Net profit estimates for FY24E, FY25E, and FY26E are RMB 2,458 million, RMB 2,709 million, and RMB 3,315 million, reflecting year-on-year growth rates of 123.6%, 10.2%, and 22.4% [5][11]. - The report indicates a recovery in GPM, with projections of 16.4% for FY24E, 16.8% for FY25E, and 17.6% for FY26E [7][11]. Market Position and Growth Drivers - Sunny Optical is expected to capture increased demand from iPhone and Android customers, with iPhone market share projected to grow to 18% in 2024 and 25% in 2025 [2]. - The report anticipates significant growth in the automotive lens segment, with a compound annual growth rate (CAGR) of 25% from FY22 to FY24E [8]. - The company is positioned to benefit from the recovery in the smartphone market and the introduction of augmented reality (AR) and virtual reality (VR) products [2][8]. Valuation Metrics - The report assigns a price-to-earnings (P/E) ratio of 25.2x for FY25E, reflecting the company's diversified growth across multiple business segments [8][9]. - The valuation is based on a sum-of-the-parts (SOTP) approach, with different P/E ratios assigned to various business units, including 18x for camera modules and 35x for automotive lenses [8][9].

22 Jul 2024 CMB International Global Markets | Equity Research | Company Update Sunny Optical (2382 HK) Positive profit alert alleviates GPM concerns; Upgrade to BUY We upgrade Sunny Optical to BUY and raise our TP to HK$67.88 following 1H24 positive profit alert of 140-150% YoY growth, as we think Sunny's GPM recovery, iPhone share gain and hybrid/periscope cam adoption are tracking ahead of expectations. We revised up our FY24-25E EPS by 46-82% to reflect stronger GPM, iPhone share gain (18%/25% in 2024/2 ...

Investment Rating - The report maintains a "Hold" rating for the company with a target price of HKD 47.31, reflecting a price-to-earnings ratio of 25.9 times FY25E earnings [8]. Core Insights - The company is expected to benefit from a high-end upgrade cycle driven by AI smartphones, ADAS mixed lenses, and AR Glass opportunities, indicating a positive outlook for growth [2][8]. - The management has raised global and China smartphone shipment forecasts for 2024 by 1.7% and 1.1%, respectively, suggesting a recovery in the smartphone market [2]. - The automotive segment is projected to maintain a gross profit margin (GPM) of over 40%, driven by growth in automotive modules [2]. - The XR business is anticipated to see diffraction waveguides become mainstream, positioning AR Glass as the next computing platform [2]. Financial Summary - Revenue is projected to increase from RMB 31,681 million in FY23A to RMB 36,545 million in FY24E, representing a year-over-year growth of 15.4% [6]. - Net profit is expected to recover from RMB 1,099.4 million in FY23A to RMB 1,351.2 million in FY24E, with a year-over-year growth of 22.9% [6]. - The company's earnings per share (EPS) is forecasted to rise from RMB 1.01 in FY23A to RMB 1.24 in FY24E [6]. - The price-to-earnings (P/E) ratio is projected to decrease from 43.9x in FY23A to 35.7x in FY24E [6]. Market Position and Valuation - The company holds a leading position in the camera module (CCM) market in China, with a target P/E of 18x reflecting its advanced technology capabilities [8]. - The automotive lens business is assigned a P/E of 35x due to its high profitability and growth potential, with a CAGR of 25% from FY20 to FY23E [8]. - The smartphone lens segment is valued at a P/E of 25x, indicating confidence in its growth trajectory amid ongoing upgrades [8].

Investment Rating - The report maintains a HOLD rating for Sunny Optical with a target price of HK$47.31, implying a potential downside of 0.5% from the current price of HK$47.55 [3][13]. Core Insights - The report highlights positive expectations for Sunny Optical driven by high-end upgrades in the smartphone market, advancements in AI phone technology, and growth in automotive and XR (extended reality) segments [2][3]. - Management has raised the global and China smartphone shipment forecasts for 2024, indicating a recovery in the smartphone market [2]. - The automotive segment is expected to maintain a gross profit margin (GPM) of over 40% in 2024, with growth in auto modules contributing to profitability [2]. - The XR business is positioned to capitalize on the emerging AR glass market, which is anticipated to become the next computing platform [2]. Financial Summary - Revenue is projected to grow from RMB 31,681 million in FY23A to RMB 36,545 million in FY24E, reflecting a year-on-year growth of 15.4% [11][12]. - Net profit is expected to increase from RMB 1,099.4 million in FY23A to RMB 1,351.2 million in FY24E, representing a year-on-year growth of 22.9% [11][12]. - The report indicates a recovery in gross profit margin from 14.5% in FY23A to 14.1% in FY24E, with further improvements expected in subsequent years [12][20]. Segment Performance - In the smartphone segment, management anticipates an ASP (average selling price) and GPM recovery in 2024 due to high-end specification upgrades and improved product mix [2]. - The automotive segment is projected to see stable GPM at approximately 40% in 2024, with a focus on high-margin auto modules [2]. - The XR segment is expected to see significant investment in technologies such as diffractive waveguides, positioning Sunny Optical favorably in the AR/VR market [2].

Investment Rating - The report maintains a "HOLD" rating for the company with a target price of HKD 47.31, reflecting a potential downside of 9% from the current price of HKD 52.00 [4][14]. Core Insights - The company is expected to see a recovery in smartphone shipments and an acceleration in high-end upgrades in the second half of 2024, driven by the resurgence of smartphone demand and upgrades to high-end models [2][3]. - The company holds a leading position in the global market for smartphone camera modules and automotive lenses, with significant opportunities in the high-end ADAS/LiDAR/HUD markets [2][3]. - The management is optimistic about long-term growth driven by edge AI applications, which are expected to enhance traditional hardware capabilities across various sectors including smartphones, automotive, AR/VR, and robotics [3]. Financial Summary - Revenue is projected to increase from RMB 31,681 million in FY23A to RMB 36,545 million in FY24E, representing a year-on-year growth of 15.4% [1][19]. - Net profit is expected to recover from RMB 1,099.4 million in FY23A to RMB 1,351.2 million in FY24E, with a year-on-year growth of 22.9% [1][19]. - The company's gross profit margin (GPM) is anticipated to improve from 14.5% in FY23A to 14.1% in FY24E, with further increases expected in subsequent years [1][19]. Valuation - The target price of HKD 47.31 is derived from a sum-of-the-parts (SOTP) valuation method, reflecting the company's diversified business segments and growth visibility in various markets [14][15]. - The company is assigned a price-to-earnings (P/E) ratio of 18x for its camera module business, 35x for its automotive lens business, and 25x for its smartphone lens segment, indicating strong growth potential in these areas [14][15].

M N 20 Jun 2024 CMB International Global Markets | Equity Research | Company Update Sunny Optical (2382 HK) Investor Day takeaways: High-end upgrade to accelerate in 2H24E; Edge AI to drive long-term growth We attended Sunny Optical’s Investor Day at its Yuyao headquarters. Overall, while Target Price HK$47.31 shipment guidance remained unchanged, we are encouraged by Sunny’s positive Up/Downside (9.0%) view on smartphone recovery and accelerated upgrade in high-end models in Current Price HK$52.00 2H24E. K ...

Investment Rating - The report maintains a "Buy" rating for the company [1][2]. Core Insights - The company has shown a recovery in revenue in the second half of 2023, with a year-on-year growth of 7.3% and a quarter-on-quarter growth of 21.9%, reaching 17.4 billion RMB [2]. - The company's gross margin for the second half of 2023 was recorded at 14.1%, showing a slight decline compared to the previous period [2]. - The net profit attributable to shareholders for the second half of 2023 was 660 million RMB, a decrease of 37% year-on-year [2]. - The company expects improvements in profitability for mobile products in 2024, driven by increased shipments and better product mix [2]. - The automotive business continues to grow steadily, with a revenue increase of 18% year-on-year in the second half of 2023 [2]. - The XR business has shown signs of recovery, with strategic partnerships leading to new project launches [2]. Financial Summary - The company's revenue for 2022 was 33.2 billion RMB, which decreased to 31.7 billion RMB in 2023, with a projected increase to 35.5 billion RMB in 2024 [5][19]. - The net profit attributable to shareholders dropped from 2.4 billion RMB in 2022 to 1.1 billion RMB in 2023, with an expected recovery to 1.9 billion RMB in 2024 [5][19]. - The overall gross margin is projected to improve from 14.5% in 2023 to 17.2% in 2024 [19]. - The company’s earnings per share (EPS) is expected to rise from 1.00 RMB in 2023 to 1.72 RMB in 2024 [5][19]. Segment Performance - Optical components, optoelectronic products, and optical instruments contributed 30%, 68%, and 2% to the revenue respectively in the second half of 2023 [2]. - Mobile-related products accounted for 65% of total revenue, while automotive-related products contributed 16% [2]. - The company maintained its leading position in the global automotive lens market, with a market share that widened compared to its closest competitor [2].