CICC released a Research Report stating that it maintains SUNNY OPTICAL (02382) net income forecast for 2025/2026 at 3.519/4.085 billion yuan, with the current stock price corresponding to a P/E of 21.4x/18.2x for 2025/2026. The rating of "Outperforming the Industry" is maintained with a Target Price of 99.2 Hong Kong dollars, corresponding to a P/E of 28.7x/24.4x for 2025/2026, reflecting a potential increase of 34% from the current stock price.
China International Capital Corporation's main viewpoints are as follows:
SUNNY OPTICAL announced the shipping volume data for April.
1) Mobile Optics: The company's mobile camera module shipments reached 3.9 million units, with a year-on-year/quarter-on-quarter change of -14.1%/+5.2%. Among peers, Q Technology's mobile camera module shipments totaled 1.783 million units, with a year-on-year/quarter-on-quarter change of -22.1%/+7.9%, showing a similar trend. Shipments of mobile lenses were 0.103 billion units, with a year-on-year/quarter-on-quarter change of +1.3%/+9.2%. Among peers, Largan's monthly revenue increased by +26.5%/-10.6% year-on-year/quarter-on-quarter. It is believed that the differences between the two are mainly due to the differing customer order pull patterns. 2) Onboard Related Products: The company's Onboard Camera shipments reached 1.566 million units, with a year-on-year/quarter-on-quarter change of +28.9%/+17.8%, mainly due to increased customer demand. 3) Other Fields: The company shipped 9.947 million units of other lenses, with a year-on-year/quarter-on-quarter change of +56.6%/+43.1%; other optoelectronic products shipped 3.688 million units, with a year-on-year/quarter-on-quarter change of +14.4%/+27.7%.
The shipment of onboard cameras has shown significant year-on-year growth and is bullish on the continued expansion of intelligent driving demand.
In April, SUNNY OPTICAL's onboard camera shipments increased by 28.9% year-on-year, showing impressive monthly performance, mainly due to the increase in orders for intelligent driving vehicle lenses. From January to April, the cumulative shipment increased by 15% year-on-year, reaching the guidance range for annual growth of 15-20%. It is believed that the demand for intelligent driving vehicle orders from customers is expected to continue for some time, and some traditional independent automotive brands with lower levels of intelligent driving may gradually follow up with upgrades to intelligent driving systems, suggesting a good growth potential for the company's onboard cameras. In terms of profitability, it is believed that the company can maintain a stable gross margin level through product upgrades to offset price reductions.
The shipment of mobile optical products has rebounded month-on-month, paying attention to changes in end-user demand.
According to IDC, the Global shipment of smart phones in Q1 2025 has increased by 1.5% year-on-year, showing a slowdown compared to 2024. Some segments of the Android industry chain are also affected by high base figures, with the combined shipment volume of SUNNY OPTICAL and Qiu Tai camera modules from January to April declining by 23% year-on-year, setting a tone of mediocrity for the company's mobile optical products. In April alone, the company's shipments of mobile lenses and mobile camera modules increased month-on-month, and the year-on-year growth rate of mobile lenses turned from negative to positive. Looking ahead to the second half of the year, the firm remains bullish on the potential impact of new Android releases and the innovation of iPhone 17 on mobile optical shipment volumes, suggesting continued observation of end-user demand changes and the stockpiling pace of new devices by customers. In terms of profitability, the firm believes that under the company's active optimization of product mix strategy, the ASP of mobile lenses and mobile camera modules is expected to improve and offset the impact of shipment volumes, while gross margin is likely to align with the annual guidance of 25-30% for lenses and 8-10% for modules.
Risk warning: Weak demand for Consumer Electronics, progress in automotive intelligence not meeting expectations, and AR/VR demand falling short of expectations.
