Goldman Sachs cut Sunny Optical’s target price to HK$78 from HK$86, with Neutral rating
COMPANY NEWS STOCKS VIEWS & ANALYSIS
Goldman Sachs cut Sunny Optical’s target price to HK$78 from HK$86, with Neutral rating
COMPANY NEWS STOCKS VIEWS & ANALYSIS

Goldman Sachs cut Sunny Optical’s target price to HK$78 from HK$86, with Neutral rating

 

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Apple supplier Sunny Optical’s first-half revenue missed market consensus by 6%, while gross margin missed expectation by 2.2 percentage points, due to weak sales of handset lens and camera module, Goldman Sachs said in a note.

The management attributed the poor performance to the decline in demand for smartphones and downgrading of lens specifications, which caused shipment volume, average selling price and gross margin to decline, it said. 

The broker forecasted the company to see a gradual recovery in its second-half revenue, driven by seasonal factors, automotive lenses and Apple’s new handsets, but believed its revenue growth and gross margin improvement will be limited by saturated demand for smartphones, the peak of lens specification upgrade cycle, and intensified competition in the market. 

Goldman Sachs maintained its Neutral rating on Sunny Optical, and cut its target price from HK$86 to HK$78. The broker’s forecast for net profit in 2023/24/25 is cut by 15%, 9% and 7% respectively.