Credit Suisse slashed Sunny Optical’s target price to HK$84 from HK$101

 

>>REAL-TIME UPDATES IN THE WIRE. CLICK HERE<<<

 

 

Credit Suisse slashed the target price on Sunny Optical Technology, a supplier to Apple, from HK$101 to HK$84 and maintained a Neutral rating. 

The bank also lowered the forecast of Sunny Optical earnings per share by 30%/23%/22% for 2023, 2024 and 2025 to reflect the slow recovery of smartphone demand and pressure on gross margins. 

Due to the weak demand for smartphones, the shipment forecasts for handset camera modules and handset lenses have been revised down from both growing 4% year over year to flat and 1% growth respectively. Meanwhile, citing strong demand for electric vehicles, the shipment forecast for vehicle lenses was revised upward from a 15% YoY growth to 25%.

Sunny Optical said on Wednesday that its first-half net profit attributable to shareholders is expected to tumble by 65% – 70% from a year earlier to about 407.4 – 475.3 million yuan, citing sluggish global smartphone demand, industry competitions. 

The broker said Sunny Optical is accelerating the production of lens products for major US customers, mainly 7P lenses, but the market share is not yet clear. According to the broker’s survey, the company is still trying to capture the market of US electric vehicle customers.