Citigroup released a research report that it is believed that the recent decline in the share price of 02382.HK largely reflects investors' concerns about the company's performance in fiscal year 2021, but the bank is still optimistic about the company's outlook for fiscal year 2022, as well as the share growth of car products / Apple Inc lenses and the contribution of "meta-universe".

Shipments of Shunyu's mobile lenses fell 6 per cent year-on-year to 1.4 billion last year, mobile camera module shipments rose 14 per cent to 674 million and car lens shipments rose 21 per cent to 68 million, the bank said. Affected by weak demand for smartphone products, supply chain shortages and falling average product prices, the bank forecasts revenue growth of 2 per cent to 39 billion yuan for fiscal 2021 and expected profit growth of 9 per cent to 5.3 billion yuan.

Looking ahead to 2022, Citi predicts that global smartphone shipments will fall by 2%. Weak demand and destocking will inevitably affect Shunyu, but it is estimated that the company's share of Apple Inc lenses and demand for car lenses and modules will rebound. Yuanyu components will be the driving force for Shunyu's growth, which is expected to contribute about 20% to this year's revenue.

Citi believes that in view of Shunyu's weak revenue and profit performance in the second half of fiscal 2021 and a more cautious forecast for smartphone products, it cut its fiscal 2021 profit by 16 per cent, but based on an increase in the contribution of car-related products, only fine-tune the profit forecast for fiscal year 2022-2023 by about 6 per cent. The bank lowered Shunyu's target price from 280 yuan to 275 yuan, maintaining a "buy" rating.