Zhitong Financial APP learned that Fu Rui issued a research report that reiterated Sunny Optical's (02382) "buy" rating and cut its revenue forecast for 2022-24 by 7% to reflect the impact of depressed demand on mobile phone shipments. The target price was raised from HK $134.48 to HK $142.63, with an attractive valuation and long-term growth potential.

The company's first-half sales and operating profit were slightly higher than the bank's expectations, but below market expectations, the report said. Demand for smartphones remains weak in the second half of the year, but growth in the company's auto and automotive AR/VR business should pick up. The bank believes that the current conservative guidance from management may represent a bottom in profits, coupled with a leading position in emerging applications, that performance is expected to recover next year.