SUNNY OPTICAL(HK:02382) Zhao Yin Guo Ji·2024-08-22 10:28Investment Rating - The report maintains a "BUY" rating for Sunny Optical, with a target price (TP) raised to HK$72.52 from the previous HK$67.88, indicating a potential upside of 47.3% [2][23]. Core Insights - Sunny Optical's 1H24 revenue and net profit grew by 32% and 145% year-on-year, respectively, driven by a recovery in average selling prices (ASP) and gross profit margins (GPM) in the smartphone segment, as well as strong growth in automotive and XR (extended reality) products [2][12]. - The company has revised its shipment guidance for HLS (High-Level Sensors) and VLS (Vehicle Lens Systems) for 2024, expecting a year-on-year increase of 5-10% and 10-15%, respectively [2][12]. - The report highlights upcoming catalysts, including the iPhone 16 launch and the rise of Android AI smartphones, which are expected to drive further growth [2][12]. Summary by Sections Financial Performance - 1H24 revenue reached HK$16,225 million, with a gross profit margin of 17.2%, reflecting a year-on-year increase of 2.3 percentage points [12][14]. - The net profit for 1H24 was HK$2,452 million, exceeding consensus estimates by 4% [12][14]. - Revenue projections for FY24E are set at HK$39,765 million, with expected growth continuing into FY25E and FY26E [14][26]. Market Position and Growth Drivers - Sunny Optical is positioned as a leader in the optical components market, with significant growth expected from the smartphone and automotive sectors [2][12]. - The report emphasizes the positive outlook for the company's ASP and GPM, particularly in the high-end smartphone segment and automotive lenses, which are projected to grow significantly [2][12]. Valuation Metrics - The new target price of HK$72.52 is based on a sum-of-the-parts (SOTP) valuation, reflecting a price-to-earnings (P/E) ratio of 24.9x for FY25E [2][23]. - The report assigns different P/E multiples to various business segments, with 18x for camera modules, 25x for smartphone lenses, and 35x for automotive lenses, indicating strong growth potential across these areas [2][23].