【行业研究报告】舜宇光学科技-Shipment weakness likely to persist into 1Q23E;Maintain HOLD

11Jan202311Jan2023CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdateSunnyOptical(2382HK)Shipmentweaknesslikelytopersistinto1Q23E;MaintainHOLDSunnyOpticalreportedDecHLS/HCMshipmentwith40%/29%YoYdecline(vs-26%/-23%inNov),belowourexpectationsmainlyduetoAndroidinventorydestockingandordercorrectionafterasoftholidayseason.Inaddition,VLSshipmentdeceleratedto1%YoYinDec(vs47%YoYinNov).Ourbelow-consensusEPS(10%/8%belowinFY22/23E)mainlyreflectedourconcernsoncontinuedshipment/marginpressureinto1H23E.DespitepotentialupsideiniPhoneHLS,AR/VRandautomodulesin2023E,weexpecthighsalesexposuretoAndroidclients(75%+ofsales)willremainanoverhanginnearterm.WetrimmedFY22-24EEPSby3-7%toreflectslowerdemandrecovery.For2H22E,weestimaterev/NPtodecline14%/44%YoY.Tradingat34.2x/24.1xFY22/23EP/E,wethinkthestockisfairlyvalued.MaintainHOLDandloweredSOTP-basedTPtoHK$96.3.Worse-than-expectedHLS/HCMshipmentinDec;Expectnear-termordercorrectionaftersoftholidayseason.SunnypostedDecHLS/HCMshipmentof72.4mn/36.9mn,-40%/-29%YoY(vs-26%/-23%inJul).FY22HLS/HCMshipmentreached1,193mn/517mn,-17%/-23%YoY(vsfull-yearguidance-15/-20%YoY).Overall,webelieveAndroidongoingdestockingandApple’spotentialordercutwillremainanoverhanginthenearterm.WhileSunny’siPhoneHLSbusinessisgrowing,itssalescontribution(6%offull-yearshipment)willnotbecomemajorgrowthdriveratthisstage.AutolensmomentumfadedinDec;PositiveonautocammoduleandAR/VR.VLSshipmentinDecwas4.9mnunit(+1.4%YoY/-34%MoM),belowmarketexpectations,whileFY22shipmentcameinat78.9mn,+16%YoY,in-linewithguidanceof10-15%YoY,asautodemandisgraduallyrecoveringin2H22.Lookingahead,wearepositiveonautolensASPupsideonspecupgradein2H23E,andmgmt.guidedforRMB10bnrevenueforautocameramoduleonLiDAR/AU-HUDorderwins.ForAR/VR,mgmt.guided50%YoYrevenuegrowthforVR/ARsegmentin2022.OurFY22-24EEPSare8-14%belowconsensus;MaintainHOLD.WhilewemaintainourpositiveviewonSunny’sindustryleadershipandproductroadmap,webelieveinventorydestockingandhighexposuretohandsetsegment(79%ofsales,vs8%forauto-related)willremaintheoverhangforthestock.WecutFY22-24EEPSby3-7%toreflectslowerdemandrecovery.Wethinkthestockisfairlyvaluedat34.2x/24.1xFY22/23EP/E.MaintainHOLDwithnewSOTP-basedTPofHK$96.3(23.0xFY23EP/E).TargetPriceHK$96.30(PreviousTPHK$102.30)Up/Downside+0.7%CurrentPriceHK$95.65ChinaTechnologyAlexNG(852)39000881alexng@cmbi.com.hkLilyYANG,Ph.D(852)39163716lilyyang@cmbi.com.hkHanqingLIlihanqing@cmbi.com.hkStockDataMktCap(HK$mn)104,928.1Avg3mthst/o(HK$mn)86.552wHigh/Low(HK$)225.40/67.55TotalIssuedShares(mn)1097.0Source:FactSetShareholdingStructureSunXuLtd35.5%JPMorganChase&Co4.9%Source:HKExSharePerformanceAbsoluteRelative1-mth-10.7%-16.7%3-mth29.3%4.3%6-mth-17.8%-16.2%Source:FactSet12-mthPricePerformanceSource:FactSetRelatedReports:1)SoftHLS/HCMinAug;Stillawaitingturningpoint–13Sep20222)Shipmentguidanceloweredasexpected;Awaitingmarketrecovery–17Aug2022EarningsSummary(YE31Dec)FY20AFY21AFY22EFY23EFY24ERevenue(RMBmn)38,00237,49732,13636,32441,303YoYgrowth(%)0.4(1.3)(14.3)13.013.7Netprofit(RMBmn)4,950.35,061.12,704.53,833.94,641.7YoYgrowth(%)23.22.2(46.6)41.821.1EPS(Reported)(RMB)4.474.572.433.454.17ConsensusEPS(RMB)0.004.572.713.764.86P/E(x)25.538.334.224.119.9P/B(x)7.49.23.93.53.0Yield(%)0.60.50.60.81.0ROE(%)33.526.812.315.616.5Netgearing(%)(4.6)(16.1)(21.2)(21.5)(30.6)Source:Companydata,Bloomberg,CMBIGMestimates