Sunny Optical (2382.HK)_ Dec shipment_ Handset lens -6% MoM, Vehicle lens -15% MoM; Camera modules +43% MoM; Neutral

Summary of Sunny Optical (2382.HK) Conference Call Company Overview - Company: Sunny Optical Technology Group Co., Ltd. (2382.HK) - Industry: Optical components and modules, including handset lenses, vehicle lenses, and camera modules Key Points and Arguments Shipment Performance - Handset Lens: - December shipment decreased by 6% month-over-month (MoM) and 2% year-over-year (YoY) to 105 million units - Total 2024 shipment forecast at 1.3 billion units, reflecting a 13% YoY increase, consistent with previous estimates [1][7] - Camera Modules: - December shipment increased by 43% MoM and 13% YoY, attributed to low base from last year and year-end delivery requests - Total 2024 shipment forecast at 534 million units, a 6% YoY decline, in line with previous estimates [1][8] - Vehicle Lens: - December shipment decreased by 15% MoM but increased by 35% YoY to 6 million units, supported by new projects from clients - Total 2024 shipment forecast at 102 million units, reflecting a 13% YoY increase, slightly below previous estimates [1][7] Financial Performance - Revenue Estimates: - 2024 revenue estimate revised to RMB 38.071 billion, unchanged from previous estimates - 2025 revenue estimate revised to RMB 45.841 billion, also unchanged [9] - Earnings Estimates: - 2024 net income estimate revised to RMB 2.386 billion, reflecting no change from previous estimates - 2025 net income estimate remains at RMB 2.969 billion [9] Margins and Valuation - Margins: - Gross margin for 2024 estimated at 17.4%, with operating margin at 5.8% - Margins expected to improve slightly in subsequent years [9][10] - Valuation: - Target price maintained at HK$70.4, based on a price-to-earnings (P/E) multiple of 24.2x for 2025, consistent with historical averages - Current share price at HK$62.70, indicating a potential upside of 12.3% [12][14] Risks - Competitive Landscape: - Potential for increased competition in the handset lens market - Variability in shipment growth for camera modules and market share gains [13] - Currency Fluctuations: - Risks associated with RMB appreciation or depreciation impacting financial performance [13] Additional Important Information - Market Context: - The company is facing challenges from competitors such as Largan and Genius, with varying revenue performances noted [1] - Management Commentary: - Management remains cautious about the outlook, particularly in the handset lens segment, while expressing optimism about vehicle lens growth due to new projects [1][8] This summary encapsulates the key insights from the conference call regarding Sunny Optical's performance, financial outlook, and market conditions, providing a comprehensive overview for potential investors.