【行业研究报告】舜宇光学科技-Soft HLS/HCM in Aug; Still awaiting turning point

13Sep202213Sep2022CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdateSunnyOptical(2382HK)SoftHLS/HCMinAug;StillawaitingturningpointSunnyOpticalreportedAugHLS/HCMshipmentwith26%/30%YoYdecline(vs-15%/-34%inJul),whichwebelievewasweakduetosluggishsmartphonedemandandAndroidinventorydestocking.DespitesolidVLSrecoveryinAug(+29%YoY),ourbelow-consensusEPS(14%/12%belowinFY22/23E)mainlyreflectedourconcernsonworseningHCM/HLSdemandandmarginpressurein4Q22E.AlthoughweseepotentialupsideiniPhoneHLS,AR/VRandautomodulesin2H22E,weexpecthighsalesexposuretoAndroidclients(75%+ofsales)willcontinuetoweighonthestockinnearterm.Tradingat35.9x/24.3xFY22/23EP/E,wethinkthestockisfairlyvalued.MaintainHOLD.WeakHLS/HCMshipmentinAug;iPhoneHLSordershardtomovetheneedle.SunnyreportedAugHLS/HCMshipmentof92.6mn/38.7mn,-26%/-30%YoY(vs-15%/-34%inJul).8M22HLS/HCMshipmentreached833mn/364mn,-12%/-23%YoY(vsfull-yearguidance-15/-20%YoY).Overall,weexpectAndroidongoingdestockingwillcontinuetodragHCM/HLSrecoveryin2H22E,asSunny’siPhoneHLSbusiness(6%offull-yearshipment)isgrowingbutwouldnotmovetheneedleatthisstage.Positiveoutlookforautolens/cammoduleandAR/VR.VLSshipmentforAugreached7.0mnunit(+29%YoY/9%MoM),and8M22shipmentcameinat51.1mn,+6.7%YoY,asautodemandisgraduallyrecoveronADASdemandandlowbasein2H21.Inaddition,wearepositiveonautolensASPupsideonpixelupgrade,andmgmt.guidedforRMB10bnrevenueforautocameramoduleonLiDAR/AU-HUDorderwins.ForAR/VR,mgmt.expectedrobustgrowthinVRproductsandguided50%YoYrevenuegrowthforVR/ARsegmentin2022.Valuation/Keyrisks.WhilewearepositiveonSunny’sproductroadmapandtechnologyleadership,recentsmartphoneinventorydestockingandSunny’shighexposuretohandsetsegment(79%ofsales,vs8%forauto-related)willcontinuetoweighonthestockinnearterm.Wethinkthestockisfairlyvaluedat35.9x/24.3xFY22/23EP/E.MaintainHOLDwithSOTP-basedTPofHK$102.3(23.0xFY23EP/E).TargetPriceHK$102.30(PreviousTPHK$102.30)Up/Downside0.5%CurrentPriceHK$101.80ChinaTechnologyAlexNG(852)39000881alexng@cmbi.com.hkLilyYANG,Ph.D(852)39163716lilyyang@cmbi.com.hkHanqingLIlihanqing@cmbi.com.hkStockDataMktCap(HK$mn)111,674.6Avg3mthst/o(HK$mn)112.652wHigh/Low(HK$)252.60/95.30TotalIssuedShares(mn)1097.0Source:FactSetShareholdingStructureSunXuLtd35.5%JPMorganChase&Co4.9%Source:HKExSharePerformanceAbsoluteRelative1-mth-12.2%-9.3%3-mth-12.8%-1.6%6-mth-29.7%-23.5%Source:FactSet12-mthPricePerformanceSource:FactSetEarningsSummary(YE31Dec)FY20AFY21AFY22EFY23EFY24ERevenue(RMBmn)38,00237,49734,25339,14144,853YoYgrowth(%)0.4(1.3)(8.7)14.314.6Netprofit(RMBmn)4,950.35,061.12,781.64,109.34,925.0YoYgrowth(%)23.22.2(45.0)47.719.9EPS(Reported)(RMB)4.474.572.503.694.43ConsensusEPS(RMB)NANA2.914.205.38P/E(x)25.538.335.924.320.3P/B(x)7.49.24.23.73.2Yield(%)0.60.50.50.81.0ROE(%)33.526.812.616.617.3Netgearing(%)(4.6)(19.5)(20.0)(21.8)(30.4)Source:Companydata,Bloomberg,CMBIGMestimates