Glonghui, March 25 | Bank of America Securities released a report saying that the net profit of Shunyu Optical Technology fell 37% year-on-year in the second half of last year, which is the lower limit of 27% to 38% year-on-year decline according to the previous profit warning guidelines, and lower than the bank's 6%, but in line with market expectations. Operating profit was 48% and 55% lower than the bank's and market expectations, mainly affected by the year-on-year decline in gross margin of 4.9 percentage points to 14.1%. The bank lowered Sunwoo's profit forecast for this year and next two years by 18% to 19%, reflecting weak shipping guidelines. The target price dropped from HK$61 to HK$51, maintaining a “neutral” rating, reflecting the balance of risk and return. The bank agreed that Shunyu would benefit from improvements in the overall optical industry, as high-end phones will be upgraded, but the company still needs extra efforts to reach gross margin guidelines. Due to the low visibility of demand in the Chinese market, in particular, the supply specifications of Chinese customers are already higher than those of overseas customers. The bank also said that management expects automotive lens deliveries to increase by 10% this year, down from 15% to 20% from 2021 to 2023. Apart from being heavily involved in traditional lenses, they also believe the guidance is weak due to the recent weakness in the European and American markets.