SUNNY OPTICAL(HK:02382) Zhao Yin Guo Ji·2024-06-20 08:22Investment 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].