Everbright overseas released a research report saying it maintained Sunny Optical's (02382) "buy" rating and lowered its 2022-24 net profit forecast by 12% to 31.11 pound 41.94 / 5.28 billion yuan in view of the continued weak demand for Android phones, Zhitong Financial APP learned. The company's 1H22 achieved revenue of 16.972 billion yuan, down 14.4% from a year earlier, and gross profit margin fell 4.1% to 20.8% from a year earlier. With the larger-than-expected progress made by major customers in the United States, the increase in the share of net profits of non-mobile business driven by new products such as lidar and VR/AR, and the deepening of the superimposed smart eye strategy, it is expected to further open the valuation space in 2023.

According to the report, the company's lidar / HUD has a total of 20 designated projects in hand, and the new vehicle business has entered the volume stage. In terms of VR/AR, revenue from 1H22-related products rose 11% year-on-year, although the market is expected to revise shipments of Meta Quest products. In view of the mass production of high-value VR pancake display modules and the main supply position for major customers, VR/AR-related product revenue is still expected to grow by more than 50% year-on-year this year. Taking into account: 1) potential entry into the supply chain of MR products from major US customers; 2) in the long run, the proportion of XR optical value continues to increase, and the company also has the strength to integrate the whole XR. Everbright overseas expects its new vehicle business and VR/AR to achieve high-speed growth and smooth growth logic in the medium and long term.