CICC released a research report stating that they are maintaining the "outperform" rating. Taking into account the release of this year's bidding demand for multiple units and advanced maintenance, the full-year profit forecast is raised by 3% to 13.01 billion RMB, and the profit forecast for 2025 is maintained. Based on the upward revision of profit and the optimistic outlook for the demand for multiple units, the H-share target price is raised by 18% to HKD 6. The report states that the company's performance in the first half of the year exceeded the bank's expectations. Looking ahead, the bank believes that with the continuous increase in railway passenger traffic, the increase in the utilization rate and the extended service life of multiple units, the demand for multiple units and advanced maintenance is expected to be further released, benefiting the company's revenue and profit growth. $SUNNY OPTICAL (02382.HK)$ asia vets forecasts net income attributable to shareholders of 2.47 billion yuan in 2024 and 2.87 billion yuan in 2025. The bank maintains its outperform rating on the industry and a target price of 63.4 Hong Kong dollars. The company's shipment volume declined month-on-month in October, focusing on the upgrade of android new machine optics and the optimization of the company's product structure. The growth of in-car and XR-related products is stable.

CICC's main points are as follows:

Sunny Optical Technology announced the shipment data for October:

1) Mobile optics: The company's mobile camera module shipments were 33.779 million units, a year-on-year decrease of 37.5% and a month-on-month decrease of 8.1%. The main reason is that the company focuses on mid-to-high-end projects, leading to a year-on-year decline in shipments but a significant improvement in product structure. Mobile lens shipments were 0.116 billion units, a year-on-year decrease of 1.9% and a month-on-month decrease of 2.6%. During the same period, Largan Precision's monthly revenue increased by 3.5% year-on-year and 0.4% month-on-month, while Gentex's monthly revenue decreased by 22% year-on-year and 24% month-on-month. We believe this mainly reflects the differences in android customer stocking demand.

2) In-car related products: The company's in-car lens shipments in October were 8.706 million units, an 11.5% year-on-year increase and a 6.5% month-on-month decrease, confirming the trend of year-on-year growth for the whole year.

3) Other optoelectronic products: Shipments in October were 0.727 million units, an increase of 120.5% year-on-year and a decrease of 0.6% month-on-month.

Mobile optical shipments slightly decreased month-on-month, focusing on the optical upgrade of new Android devices and optimizing the company's product structure.

In the field of mobile camera module, Sunny Optical's shipments from January to October decreased by 5% year-on-year, mainly due to the company's continued push for product structure upgrades strategy. We believe that the improvement in the ASP and gross margin of the 2H24 camera module may offset the impact of the shipment decline, still expecting to achieve robust business growth. On the mobile lens side, Sunny Optical's shipments from January to October increased by 17% year-on-year. We expect the annual shipment growth rate to exceed the company's previous guidance, while ASP and gross margin are also expected to improve with the shipment of more 6P, 7P, and glass-plastic hybrid lenses. From an innovative perspective, optics play a crucial role in mobile micro-innovation. Flagship new phones such as Honor Magic7, Xiaomi 15, and Vivo X200 released in October are all equipped with 50 million pixel triple cameras. The Xiaomi 15 Pro has changed the floating telephoto lens to a periscope telephoto lens. We believe that the optical upgrade of flagship models is still ongoing and may further penetrate into mid-range and entry-level models in the future. We are bullish on Sunny Optical as a leading optical company, continuously optimizing its product structure amidst the expansion of the high-end lens and module market capacity.

Car-mounted and XR-related products have a steady growth rate.

Sunny Optical's car-mounted lens shipments from January to October increased by 12% year-on-year. We see improvements in the per-vehicle installation volume, average pixels, and localization level of automotive cameras, and are optimistic that the company, as a leading supplier of car-mounted lenses, is expected to continue benefiting. In addition, the shipments of other optoelectronic products from Sunny Optical in January to October increased by 51% year-on-year. We expect that the revenue from products such as camera modules and lenses will achieve rapid growth following the mass production of AR/VR terminals.

Risks: Global terminal demand remains weak, and the smartification of the automotive industry is progressing slower than expected.