SUNNY OPTICAL(HK:02382) Zhao Yin Guo Ji·2024-06-26 03:31Investment 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].