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Sunny Optical Technology Group （2382.HK） July： Changes in Product Mix Impacted CCM Shipments
2024-08-13 09:06

Investment Rating - The investment rating for Sunny Optical Technology Group is maintained as BUY with a target price of HKD60.00 [8][9][12]. Core Views - The report indicates that handset lens shipments grew robustly, while CCM shipments fell due to a shift in product mix. The auto lens shipment volume expanded due to increased client demand [3][4]. - The management noted that the growth in handset lens shipments was primarily due to a low base last year, and the decline in handset CCM shipments was mainly due to decreased low-end handset shipments [3][4]. - A better product mix is expected to boost gross profit margin (GPM), and monitoring of potential restocking by Apple and Android clients is suggested for the upcoming quarters [3][4]. Summary by Sections Handset Lenses - In July, Sunny shipped 115 million handset lenses, representing a year-on-year increase of 20.7% and a month-on-month increase of 6.1% [4]. - Shipments of handset CCMs were 43.90 million, up 5.5% month-on-month but down 19.5% year-on-year, attributed to decreased low-end handset shipments [4]. Auto Lenses - Auto lens shipments increased by 9.0% year-on-year and 15.3% month-on-month, totaling 8,811k units in July, driven by increased demand [5]. - The report highlights the weak auto demand overseas and suggests monitoring the impact on Sunny's auto lens business [5]. Financial Forecasts - The attributable net profit forecasts for 2024, 2025, and 2026 are RMB2,317 million, RMB2,767 million, and RMB3,357 million respectively [3][19]. - Revenue projections for 2024, 2025, and 2026 are RMB38,433 million, RMB41,447 million, and RMB44,186 million respectively, indicating a growth trajectory [19][21]. Valuation - The target price of HKD60 is derived from a sum-of-the-parts (SOTP) analysis, implying a 2024E PE of 26x [12][13]. - The valuation breakdown includes HKD20.8 per share for auto products, HKD10.1 for AR/VR, HKD19.9 for handsets, and HKD9.3 for other businesses [12][13].