Sunny Optical (2382 HK) Summary
Core Content
Sunny Optical is a company operating in the global markets, primarily in the optical components and optoelectronic products sector. The company has a diversified business model with exposure to multiple segments, including auto lenses, handset lenses, and emerging technologies such as AR/VR and LiDAR. The report provides an analysis of the company's financial performance, guidance for the upcoming fiscal year, and valuation insights.
Main Points
Current Stock Performance
- Target Price (TP): HK$125.7 (revised down from HK$140.5)
- Current Price: HK$140.8
- Price Performance (12 months): Down by 11% from the previous TP
- Market Cap: HK$158,824 million
- Average 3-Month Turnover: HK$1,086.01 million
- 52-Week High/Low: HK$259.4 / HK$113.9
- Total Issued Shares: 1,097 million
Shareholding Structure
- SUN XU LTD: 35.47%
- JPMORGAN CHASE: 5.73%
- WENJIAN WANG: 3.04%
2021 Review
- Revenue: Declined 1.3% YoY due to HLS shipment decline and de-spec trend
- GPM (Gross Profit Margin): Increased by 0.4% YoY to 23.3%
- HLS shipment: Down 5.9% YoY to 1,439 million units
- VLS shipment: Up 21.0% YoY to 673 million units
- HCM shipment: Up 13.6% YoY to 673 million units
2022 Guidance
- HLS: +5-10% YoY, driven by Apple's share gain
- VLS: +20-30% YoY, with wider range due to chip shortage uncertainty
- HCM: +10-15% YoY, driven by Samsung's share gain
- AR/VR: Revenue to grow 50% YoY
- Auto cam module: Revenue to reach RMB1 billion
- Total Capex: RMB3 billion, allocated across different segments including AR/VR, auto cam modules, and capacity expansion in India and Vietnam
Capacity Expansion Plan
- HLS: From 180KK/m to 190KK/m
- VLS: From 7.5KK/m to 8KK/m
- HCM (excluding auto module): Maintains at 75KK/m
Earnings Summary (FY20A - FY24E)
| FY |
Revenue (RMB mn) |
Net Income (RMB mn) |
EPS (RMB) |
P/E (x) |
| FY20A |
38,002 |
4,882 |
4.47 |
26.2 |
| FY21A |
37,497 |
4,993 |
4.57 |
25.6 |
| FY22E |
40,226 |
5,128 |
4.69 |
24.9 |
| FY23E |
46,553 |
6,110 |
5.59 |
20.9 |
| FY24E |
54,639 |
7,294 |
6.68 |
17.5 |
Earnings Revision
- Revenue: Revised up by 2% for FY22E, down by 16% for FY23E, and down by 16% for FY24E
- Gross Profit: Revised down by 4% for FY22E, down by 21% for FY23E, and down by 18% for FY24E
- Operating Profit: Revised down by 9% for FY22E, down by 10% for FY23E, and down by 8% for FY24E
- Net Profit: Revised down by 8% for FY22E, down by 10% for FY23E, and down by 22% for FY24E
- EPS: Revised down by 22% for FY22E, down by 25% for FY23E, and down by 20% for FY24E
Valuation
- P/E (FY22E): 24.9x
- P/B (FY22E): 5.1x
- ROE (FY22E): 20.4%
- Target Price (TP): HK$125.7, based on SOTP valuation methodology with a weighted-average P/E multiple of 22.2x FY22E EPS
SOTP Valuation
| Business Segment |
% of FY22E Profit |
FY22E EPS (RMB) |
Target P/E |
Implied P/E |
| Camera modules |
40.8% |
1.92 |
15x |
- |
| Handset lenses |
44.8% |
2.10 |
25x |
- |
| Vehicle lenses |
13.1% |
0.61 |
35x |
- |
| Others |
1.3% |
0.06 |
25x |
- |
| Total |
- |
4.69 |
22.2x |
22.2x |
Peer Comparison
| Company |
Ticker |
Rating |
Cap (US$ mn) |
Price (LC) |
TP (LC) |
Downside (%) |
P/E (FY22E) |
P/B (FY22E) |
ROE (%) |
| Sunny Optical |
2382 HK |
HOLD |
19,737 |
140.8 |
125.7 |
-11% |
24.9 |
5.1 |
20.4 |
| Q-tech |
1478 HK |
BUY |
912 |
6.0 |
8.6 |
42% |
7.5 |
1.2 |
15.8 |
| Cowell |
1415 HK |
NR |
855 |
8.02 |
NA |
- |
10.8 |
7.9 |
22.8 |
| Truly |
732 HK |
NR |
1,026 |
2.44 |
NA |
- |
4.8 |
3.4 |
13.1 |
| Catcher |
2474 TT |
NR |
3,932 |
147.50 |
NA |
- |
12.2 |
11.1 |
5.9 |
| Largan |
3008 TT |
NR |
9,390 |
2000.00 |
NA |
- |
13.7 |
12.9 |
12.7 |
| Lite-on |
2301 TT |
NR |
5,554 |
67.50 |
NA |
- |
11.7 |
10.8 |
16.6 |
| Primax |
4915 TT |
NR |
832 |
52.20 |
NA |
- |
8.8 |
8.0 |
17.0 |
| O-film |
002456 CH |
NR |
3,799 |
7.43 |
NA |
- |
21.4 |
19.6 |
3.8 |
Key Ratios
| FY |
Revenue Growth (%) |
Net Profit Growth (%) |
Gross Margin (%) |
Operating Margin (%) |
Net Margin (%) |
| FY20A |
0.4 |
22.3 |
22.9 |
15.5 |
12.8 |
| FY21A |
-1.3 |
2.3 |
23.3 |
15.6 |
13.3 |
| FY22E |
7.3 |
2.7 |
22.4 |
15.1 |
12.7 |
| FY23E |
15.7 |
19.2 |
23.5 |
15.7 |
13.1 |
| FY24E |
17.4 |
19.4 |
23.8 |
15.9 |
13.3 |
Conclusion
The report indicates that Sunny Optical faces headwinds in the short term, primarily due to intensified competition in the handset lens segment, which constitutes 79% of its sales. Despite this, the company is positioned to benefit from long-term opportunities in AR/VR, auto cam modules, and LiDAR. The stock is considered fairly valued at 24.9x FY22E P/E, and the recommendation remains to Maintain HOLD with a revised target price of HK$125.7.
