【行业研究报告】舜宇光学科技-FY22E preview; Bumpy recovery in 2023

15Mar202315Mar2023CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdateSunnyOptical(2382HK)FY22Epreview;Bumpyrecoveryin2023SunnywillreportitsFY22resultson21Mar.Weestimaterevenue/netprofittodecline21%/52%YoY,largelyin-linewithprofitwarning(down50-55%YoY)announcedearlier.GivenrecentAndroiddestockingandappleordercorrection,weexpectHCM/HLSshipmentweaknesstopersistinto1H23E.Inaddition,webelieveNEVsalesslowdownwillweighonVLSdemandinFY23E.Despitebumpyrecoveryin2023,wearepositiveonVCM/periscope/AR/VRtodrivegrowthinlongerterm.MaintainHOLDwithSOTP-basedTPofHK$92.51,implying23.6xFY23EP/E.FY22preview:HCM/HLSdraggedbysmartphonedemandweakness.WeestimateFY22Erevenue/netprofittodecline21%/52%YoY,mainlyduetoweaksmartphonedemandandcamerade-spectrend.Bysegment,weexpectHCM/HLSrevenuetodrop23%/17%YoYonAndroidweaknessandVLSrevenuewillclimb16%YoYdrivenbystrongADASadoption.WeestimatelowerGPMof20.6%onhighermaterialcostandlowutilization.HCM/HLS:Expectasoft1H23Eonhighbase.Sunny’sFebHCM/HLSshipmentremainedsluggishwith39%/26%YoYdecline(vs.-19%/-49%inJan),whichreaffirmedourviewthatdemandweaknesswillpersistin1Q23E.WeexpectflattishHCM/HLSshipmentin1H23Eonhighbaseandinventorycorrection.VLS:Expectshipmentslowdownin1H23E.WhileVLSFeb.shipmentwasup40%YoY(vs.+22%inJan.),weexpectNEVsalesslowdownwillaffectorderdemandin2023givensubsidyexpiryandslowerADASpenetration.Assuch,weexpectslowershipmentgrowthin1H23EbutASPhikedrivenbyhigh-endcameraproducts.Fivekeyquestionsformgmt.atinvestormeeting.1)HLSmarketshareandupgradewithUSmajorcustomer;2)periscopecamoutlookinAndroidcamp;3)Sunny’sviewonVLSdemandgivenslowerglobalautosales;4)automoduleorderwinsandcapacityexpansion;and5)AR/VRoutlookgivenmajorcustomerweakness.OurFY22-24EEPSare15-20%belowconsensus;MaintainHOLD.Tradingat23x/19xFY23/24EP/E,wethinkthestockisfairlyvalued.WhilewearepositiveonSunny’sindustryleadership,productroadmapandopportunitiesinautocamera/VCM/AR/VR,webelieveinventorydestockingandhighexposuretohandsetsegment(70%ofsales,vs10%forauto-related)willremaintheoverhangforthestock.MaintainHOLDwithSOTP-basedTPofHK$92.51.TargetPriceHK$92.51(PreviousTPHK$92.51)Up/Downside9.4%CurrentPriceHK$84.55ChinaTechnologyAlexNG(852)39000881alexng@cmbi.com.hkLilyYANG,Ph.D(852)39163716lilyyang@cmbi.com.hkHanqingLIlihanqing@cmbi.com.hkStockDataMktCap(HK$mn)92,751.4Avg3mthst/o(HK$mn)97.452wHigh/Low(HK$)144.60/67.55TotalIssuedShares(mn)1097.0Source:FactSetShareholdingStructureSunXuLtd35.5%JPMorganChase&Co4.9%Source:HKExSharePerformanceAbsoluteRelative1-mth-14.6%-6.4%3-mth-10.5%-8.5%6-mth-15.2%-17.0%Source:FactSet12-mthPricePerformanceSource:FactSetRelatedReports:1)Shipmentweaknesslikelytopersistinto1Q23E;MaintainHOLD–11Jan2023(link)2)SoftHLS/HCMinAug;Stillawaitingturningpoint–13Sep2022(link)3)Shipmentguidanceloweredasexpected;Awaitingmarketrecovery–17Aug2022(link)EarningsSummary(YE31Dec)FY20AFY21AFY22EFY23EFY24ERevenue(RMBmn)38,00237,49729,81332,21337,781YoYgrowth(%)0.4(1.3)(20.5)8.017.3Netprofit(RMBmn)4,950.35,061.12,454.23,625.54,405.0YoYgrowth(%)23.22.2(51.5)47.721.5EPS(Reported)(RMB)4.474.572.203.263.96ConsensusEPS(RMB)0.004.572.713.764.86P/E(x)25.538.333.722.818.8P/B(x)7.49.23.63.22.8Yield(%)0.60.50.60.91.0ROE(%)33.526.811.214.916.0Netgearing(%)(4.6)(16.1)(22.1)(21.6)(30.2)Source:Companydata,Bloomberg,CMBIGMestimates