CICC cut Sunny Optical’s target price by 14%, lowered forecast of 2023 profit by 44%

 

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Apple supplier Sunny Optical Technology has issed a profit warning, expecting its first-half net profit of between 407 and 475 million yuan, sliding 65% – 70% from a year earlier, which is lower than the market and CICC’s expectations, CICC said in a research note. 

Looking ahead to the second half of the year, CICC believes that the smartphone industry is expected to usher in a mild recovery, Sunny Optical still has strong competitiveness in the cell phone optical segment and the bank suggests investors to pay attention to the improvement of the company’s profitability when a potential turning demand for cell phone demand comes.

Meanwhile, Sunny Optical’s deployment in the automotive, ARVR optical fields is forward-looking and new devices’ optical upgrades may open the company’s second growth curve in the future. CICC said.

Considering that the company’s profitability in cell phone optical business is under pressure, CICC lowered the forecast of Sunny Optical’s net profit this year by 44% to 1.45 billion yuan, and by 28% to 2.23 billion yuan next year. It cut the target price by 14% to HK$81.9, maintaining an “outperform” rating.