Glonghui, March 21 | Citi published a research report saying that Sunyu Optics' performance last year was in line with expectations, but gross margin fell 4.9 percentage points year-on-year to 14.1% in the second half of last year, lower than market expectations. It is believed that this year was due to an increase in the contribution of low-end mobile phone lens modules (HCM). Looking ahead to 2024, the bank believes that the increase in Sunyu Optics' HCM market share, the increase in the share of Apple products in the mobile phone lens (HLS) business, and the increase in the gross margin and average price of mobile phone-related products will all support a significant increase in the company's market share and maintain a “buy” rating. Citi pointed out that Shunyu Optics is the main supplier of HCM for the Chinese smartphone brand. It is expected that the company will benefit from the increase in HLS profit margins, the improvement in high-end mobile phone lens resolution and the migration of advanced features, existing technical advantages, and rapid expansion in automotive lenses (VLS). There is room for calculation of profit margins in the long term. The target price is HK$79, corresponding to the projected price-earnings ratio of 30 times in 2024.