20240822-招银国际-舜宇光学科技-02382.HK-Gearing_up_for_new_growth_cycle__Raise_TP_to_HK_72.52_8页_1mb

Sunny Optical (2382 HK), a key player in optical components, has reported strong growth and revised its financial outlook in this report from CMB International Global Markets. Based on the analysis, the company achieved a 32% year-on-year (YoY) revenue increase and a remarkable 145% YoY net profit growth in its first half of 2024 (1H24), driven by recovery in average selling prices (ASP) and gross profit margin (GPM) across smartphone, automotive, and extended reality (XR) segments. This performance aligns with prior profit alerts and stems from rapid demand in high-end smartphone components like HLS and HCM, as well as auto lenses and XR applications.

Management has raised its 2024 shipment guidance for various segments. For instance, HLS shipments are expected to grow by 5-10% YoY, with ASP and GPM improvements in the second half of 2024 (2H24E). Similarly, HCM shipments are projected to remain flat or increase slightly, supported by high-end order wins. Looking ahead to 2025, key growth drivers include Apple's increased market share in front-cams, smartphone upgrades incorporating AI capabilities, auto product advancements, and Meta's AR glass initiatives. The company's integrated optical and vibration motor (OIS/VCM) enhancements for HCM are also anticipated to contribute to sustained momentum.

In terms of valuation, CMBIGM has maintained a "BUY" recommendation, raising the target price (TP) from HK$67.88 to HK$72.52, which implies a 47.3% upside from the current price of HK$49.25. This new TP is based on a 24.9x price-to-earnings (P/E) for the fiscal year 2025 (FY25E), derived from a segmented sum-of-the-parts (SOTP) approach that values the company's diverse businesses—camera modules, handset lenses, vehicle lenses, and others—based on their growth profiles. The stock trades at an attractive 20.1x FY24E P/E compared to a long-term average P/E of 33.6x, with an estimated 19% earnings growth in FY25E.

Upcoming catalysts include the iPhone 16 launch, Android AI smartphone adoption, auto supplier collaborations, and milestones like Meta's AR glasses. However, risks remain due to potential supply chain disruptions, weaker demand in regions like Asia (particularly from Samsung and Japanese automakers), and competitive pressures. The report highlights Sunny Optical's strengths in high-margin products, long-term technological advantages, and global market leadership, underpinning the sustained BUY rating despite these short-term risks.

Overall, this summary underscores Sunny Optical's strategic positioning for a new growth cycle, fueled by product upcycles and market expansion.