The company's recent situation
On April 9, Shunyu Optical Technology released March shipment data: 1) Mobile phone optics: The company shipped 418.95 million pieces of mobile phone camera module products, up 15.1% year-on-year/down 19.5% month-on-month; mobile lens products shipped 112 million pieces, up 33.7% year-on-year and 8.0% month-on-month. Looking at the breakdown, due to the adjustment of the procurement pace during the Spring Festival holiday, the company's mobile phone module business shipments fluctuated regularly in the short term; mobile phone lens products, thanks to the availability of new devices from major Android customers, have continued to increase slightly from month to month since January 2024. We have seen that since the beginning of the year, Sunyu's total mobile phone camera module shipments/mobile lens shipments in January-March increased 46%/38% year-on-year. The driving momentum was significantly superior to mobile phone terminal sales during the same period, higher than the market's previous expectations. We believe that the relatively excellent shipment performance of Shunyu's mobile optical business continues to reflect the company's comprehensive customer coverage and high-quality product competitiveness in the mobile phone optics business. We recommend investors keep up with the shipping trends in the mobile phone optics business and pay attention to the company's profit recovery opportunities; 2) Vehicle-related products: The company shipped 8.432 million car lenses in March, up 8.0% month-on-month and 17.0% year-on-year. We believe that shipments of automotive lens products will return to a regular pickup rhythm after the Spring Festival. Automobile intelligence is still one of the main industry trends in the automotive industry. As one of the leading automotive lens suppliers in the industry, Shunyu is expected to continue to benefit from the expansion of the industry brought about by industry trends.
reviews
Mobile phone optical business: The industry's shipping performance is superior to terminal sales, and the momentum for collecting goods is gradually picking up. From an industry perspective, we can see that after nearly two years of inventory removal in the mobile phone optics industry chain, the bottom signal of the pickup cycle gradually became clear. Looking back at January-March 2024, Shunyu's total mobile camera module shipments/mobile lens shipments in January-March increased 46%/38% year-on-year; Qiu Ti Technology's total mobile phone module shipments in January-March increased 24% year-on-year; and Daliguang's total revenue for January-January increased 24% year-on-year. We believe that the January-March data from the industrial chain shows that the industry's momentum to pull goods is gradually picking up; at the same time, looking at Shunyu, the year-on-month trend of mobile phone lenses in February and March was superior to the company's performance. Along with the potential release of new devices from major Android customers in the second quarter and the company's own low performance base last year, we recommend investors pay close attention to potential profitability restoration opportunities at the inflection point of goods collection.
Profit forecasting and valuation
Shunyu Optical Technology is currently trading at 23.3 times 2024/19.0 times 2025 price-earnings ratio. We maintain the company's 2024/2025 net profit forecast of 1.74 billion yuan/2.04 billion yuan. We maintain our target price at HK$63.4, which corresponds to a price-earnings ratio of 35.5 times 2024/29.1 times 2025, and has 53.0% upside compared to the current stock price.
risks
Demand for global terminals continues to weaken, and the progress of intelligence in the automotive industry falls short of expectations.