【行业研究报告】舜宇光学科技-Positive profit alert alleviates GPM concerns; Upgrade to BUY

22Jul202422Jul2024CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdateSunnyOptical(2382HK)PositiveprofitalertalleviatesGPMconcerns;UpgradetoBUYWeupgradeSunnyOpticaltoBUYandraiseourTPtoHK$67.88following1H24positiveprofitalertof140-150%YoYgrowth,aswethinkSunny’sGPMrecovery,iPhonesharegainandhybrid/periscopecamadoptionaretrackingaheadofexpectations.WerevisedupourFY24-25EEPSby46-82%toreflectstrongerGPM,iPhonesharegain(18%/25%in2024/25E,vs15%in2023),iPhoneorderwins(front-cam/TOFin2024,hybridlensin2025)andperiscope-camadoptioninAndroidflagships.WealsobelieveAIsmartphonelauncheswillaccelerateupgradecyclein2H24E.OurnewFY24/26EEPSare4-26%aboveconsensus,andournewSOTP-basedTPofHK$67.88implies25.2xFY25E.1H24earningsgrowthof140-150%YoY,aheadofexpectations.SunnyOpticalannouncedapositiveprofitalertfor1H24,andexpectedtoreport1H24earningsgrowthof140-150%YoY,drivenbystrongerGPM/ASPgrowthonbetterproductmixandsmartphonemarketrecovery.Mid-pointof1H24earningsrangeatRMB1,070mnis98%/32%aboveour/consensusestimates.Inparticular,webelievethestrongbeatwasduetobetterHCM/HSLGPMrecovery(7%/22%in1H24E,vs4.4%/18%in2H23),wellabovepriorconservativeguidance.2H24/2025Outlook:iPhonesharegain/upgrade,Androidperiscope-cam,AIsmartphonecycleandQuest3Lite.Followingachallengingsmartphonemarketin2022/23,weexpectSunnyiswell-positionedtocapturedemand/specupgradebyiPhone/Androidclientsin2H24E/2025:1)iPhonesharegain/upgradein2024(front-cam:15-20%share;32MP);2)iPhoneTOForderwinin2024;3)iPhonemain-cam(hybridlens)in2025;4)periscope-camadoptioninAndroidflagshipmodels,and5)AR/VRrecoverywithMetaARglassesandQuest3Litein2H24E(Quest6mn,vs3-4mnin2023).Marginrecovery/specupgradefasterthanexpected;UpgradetoBUY.WeraiseourFY24-25EEPSby46-82%toreflectSunny’siPhonesharegain/upgrade,HCM/HLSshipment,GPMreboundandAR/VRrecovery.OurnewSOTP-basedTPisliftedtoHK$67.88,implying25.2xFY25E(vs33.8x10-yearhist.P/E).UpcomingcatalystsincludeiPhone16launch,AndroidAIphonesandstrongermonthlyshipments.98%/32%aheadTargetPriceHK$67.88(PreviousTPHK$47.31)Up/Downside40.7%CurrentPriceHK$48.25ChinaTechnologyAlexNG(852)39000881alexng@cmbi.com.hkHanqingLIlihanqing@cmbi.com.hkStockDataMktCap(HK$mn)52,930.3Avg3mthst/o(HK$mn)625.752wHigh/Low(HK$)75.90/34.45TotalIssuedShares(mn)1097.0Source:FactSetShareholdingStructureSunXuLtd35.5%JPMorganChase&Co4.9%Source:HKExSharePerformanceAbsoluteRelative1-mth-7.2%-1.8%3-mth35.3%26.1%6-mth-14.8%-25.1%Source:FactSet12-mthPricePerformanceSource:FactSetRelatedReports:1)CMBICorpDaytakeaways:Positiveonhigh-endupgrade,AIphone,ADAShybridlensandARGlassoutlook–26Jun2024(link)2)InvestorDaytakeaways:High-endupgradetoacceleratein2H24E;EdgeAItodrivelong-termgrowth–20Jun2024(link)3)Expectationsresetonconservativeguidance;MaintainHOLD–22Mar2024(link)4)2023profitwarningworsethanfeared;MaintainHOLDonearningsdownside–1Jan2024(link)EarningsSummary(YE31Dec)FY22AFY23AFY24EFY25EFY26ERevenue(RMBmn)33,19731,68139,81644,25948,555YoYgrowth(%)(11.5)(4.6)25.711.29.7Netprofit(RMBmn)2,407.81,099.42,458.52,709.13,314.7YoYgrowth(%)(51.8)(54.3)123.610.222.4EPS(Reported)(RMB)2.201.012.252.483.04ConsensusEPS(RMB)--1.792.392.87P/E(x)20.444.619.918.114.8P/B(x)2.22.12.01.91.7Yield(%)2.11.02.22.42.9ROE(%)11.24.910.410.712.3Netgearing(%)(22.6)(45.5)(23.6)0.4(30.3)Source:Companydata,Bloomberg,CMBIGMestimates