> **来源：[研报客](https://pc.yanbaoke.cn)** # CMB International Securities | Equity Research | Company Update Summary ## Core Content Sunway (300136 CH) recently released its 1H21 results, which showed a revenue increase of +19.5% YoY but a significant decline in net profit by -47.5% YoY. This performance missed expectations, primarily due to a record-low gross margin of 15.7% in 2Q21, compared to 40.5% in 3Q20, attributed to new business ramp-up, seasonality, and rising material costs. As a result, CMBIS revised down its FY21-23E EPS estimates by 26-38%, and adjusted the target price (TP) to RMB26.6, reflecting a lower 27x FY22E P/E multiple than the previous 31x 21E P/E. ## Main Points - **Revenue and Net Profit Performance**: - 1H21 revenue was +19.5% YoY, but net profit dropped by -47.5% YoY. - Revenue in 2Q21 declined by -4.6% YoY and -10.6% QoQ. - Net profit in 2Q21 was RMB570 million, significantly below expectations. - CMBIS estimates FY21E net profit at RMB558 million, FY22E at RMB950 million, and FY23E at RMB1,454 million. - **Gross Margin Pressure**: - Gross margin in 1H21 dropped to 20.1%, compared to 30.2% in FY20. - Domestic and overseas gross margins declined to 20.0% and 17.8%, respectively, from 30.2% in FY20. - The outlook for gross margin remains cautious, with potential for recovery in 2H21 but difficulty in reaching previous levels. - **Earnings Revisions**: - CMBIS revised down its FY21-23E EPS estimates by 26-38%. - The new EPS estimates are 30-56% below the consensus. - Gross margin estimates for FY21E and FY22E are 20.1% and 22.1%, respectively. - **Target Price and Rating**: - CMBIS maintains a HOLD rating. - TP was adjusted to RMB26.6, with a 1.5% upside from the current price of RMB26.20. - The stock is currently trading at 26.6x 22E P/E, which CMBIS considers fairly valued. ## Key Information - **Financial Highlights**: - Revenue is expected to grow sequentially in 2H21E due to the peak season in the consumer electronics market. - The company's revenue by segment shows growth in antenna/RF modules, wireless charging, and EMC/EMI, while cables/connectors and RFFE show varying growth rates. - Operating and net margins are expected to decline in FY21E, with operating margin at 7.1% and net margin at 6.9%. - **Valuation Metrics**: - 12-month forward P/E and P/B ratios are provided, with the company trading at 45.3x 21E P/E and 4.1x 21E P/B. - CMBIS compares Sunway with peers like Amphenol, Luxshare, and Lingyi iTech, noting that the P/E and P/B for Sunway are in line with or below the industry average. - **Risk Factors**: - Potential risks include slower-than-expected market share gains and continued delays in new business ramp-up. - CMBIS is cautious about the near-term outlook due to margin deterioration and delayed new business performance. ## Summary Table | Metric | FY19A | FY20A | FY21E | FY22E | FY23E | |-----------------------|-----------|-----------|-----------|-----------|-----------| | Revenue (RMB mn) | 5,134 | 6,394 | 8,083 | 9,895 | 12,726 | | YoY Growth (%) | 9.1% | 24.5% | 26.4% | 22.4% | 28.6% | | Gross Margin (%) | 37.3% | 30.2% | 20.1% | 22.1% | 24.0% | | Net Profit (RMB mn) | 1,020 | 972 | 558 | 950 | 1,454 | | YoY Growth (%) | 3.2% | -4.7% | -42.7% | 70.4% | 53.1% | | EPS (RMB) | 1.049 | 1.007 | 0.578 | 0.985 | 1.508 | | Consensus EPS (RMB) | - | 1.007 | 1.329 | 1.729 | 2.159 | | P/E (x) | - | - | 45.3 | 26.6 | 17.4 | | P/B (x) | 5.4 | 4.6 | 4.1 | 3.7 | 3.1 | | ROE (%) | 21.4% | 17.5% | 9.1% | 13.7% | 17.7% | | Net Gearing (%) | 38.1% | 18.2% | 18.7% | 18.5% | 6.0% | ## Conclusion CMBIS maintains a HOLD rating on Sunway, citing continued margin pressure and delayed new business ramp-up as key concerns. The TP has been reduced to RMB26.6, and the company is considered fairly valued at its current price. Despite potential recovery in 2H21E, the long-term margin outlook remains uncertain. Investors are advised to consider the risks associated with the company's performance and seek independent financial advice.