External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

Sunny Optical Technology Group / Equity Bottom-Up

<ul><li>We upgrade Sunny Optical to BUY and raise our TP to HK$67.88 following 1H24 positive profit alert of 140-150% YoY growth, as we think Sunny’s GPM recovery, iPhone share gain and hybrid/periscope cam adoption are tracking ahead of expectations.</li><li>We revised up our FY24-25E EPS by 46-82% to reflect stronger GPM, iPhone share gain (18%/25% in 2024/25E, vs 15% in 2023), iPhone order wins (front-cam/TOF in 2024, hybrid lens in 2025) and periscopecam adoption in Android flagships.</li><li>We also believe AI smartphone launches will accelerate upgrade cycle in 2H24E. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We upgrade Sunny Optical to BUY and raise our TP to HK$67.88 following 1H24 positive profit alert of 140-150% YoY growth, as we think Sunny’s GPM recovery, iPhone share gain and hybrid/periscope cam adoption are tracking ahead of expectations.We revised up our FY24-25E EPS by 46-82% to reflect stronger GPM, iPhone share gain (18%/25% in 2024/25E, vs 15% in 2023), iPhone order wins (front-cam/TOF in 2024, hybrid lens in 2025) and periscopecam adoption in Android flagships.We also believe AI smartphone launches will accelerate upgrade cycle in 2H24E. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Sunny Optical (2382 HK) - Positive Profit Alert Alleviates GPM Concerns; Upgrade to BUY

<ul><li>We hosted Sunny Optical at CMBI Technology Corporate Day on 25 Jun, with strong client interest and positive takeaways.</li><li>Key highlights: 1) smartphone market: mgmt. raised global/China smartphone shipment forecast by 1.7%/1.1% to 1.17bn/ 276mn (+3.5%/0.4% YoY) at Investor Day in Jun; 2) HCM/HLS: ASP/GPM recovery on track in 2024 driven by spec upgrade (e.g. AI phones), easing competition, high-end customer share gains and higher utilisation; 3) auto VLS: 40%+ GPM maintained and auto module growth to drive profitability; and 4) XR biz: diffractive waveguide to become mainstream in XR devices and positive on AR Glass as the next computing platform.</li><li>Overall, we believe Sunny will benefit from the next AI-driven spec upgrade cycle given its technology leadership, strong product roadmap and strong client base.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We hosted Sunny Optical at CMBI Technology Corporate Day on 25 Jun, with strong client interest and positive takeaways.Key highlights: 1) smartphone market: mgmt. raised global/China smartphone shipment forecast by 1.7%/1.1% to 1.17bn/ 276mn (+3.5%/0.4% YoY) at Investor Day in Jun; 2) HCM/HLS: ASP/GPM recovery on track in 2024 driven by spec upgrade (e.g. AI phones), easing competition, high-end customer share gains and higher utilisation; 3) auto VLS: 40%+ GPM maintained and auto module growth to drive profitability; and 4) XR biz: diffractive waveguide to become mainstream in XR devices and positive on AR Glass as the next computing platform.Overall, we believe Sunny will benefit from the next AI-driven spec upgrade cycle given its technology leadership, strong product roadmap and strong client base.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Sunny Optical (2382 HK) - Positive on High-End Upgrade

<ul><li>We attended Sunny Optical’s Investor Day at its Yuyao headquarters.</li><li>Overall, while shipment guidance remained unchanged, we are encouraged by Sunny’s positive view on smartphone recovery and accelerated upgrade in high-end models in 2H24E.</li><li>Key highlights include 1) global No.1 position across smartphone HCM/HLS and auto lens sets, 2) breakthroughs in high-end ADAS/LiDAR/HUD markets (esp hybrid auto lens), 3) opportunities in visual inputs and edge AI (AI phone, robotics).</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We attended Sunny Optical’s Investor Day at its Yuyao headquarters.Overall, while shipment guidance remained unchanged, we are encouraged by Sunny’s positive view on smartphone recovery and accelerated upgrade in high-end models in 2H24E.Key highlights include 1) global No.1 position across smartphone HCM/HLS and auto lens sets, 2) breakthroughs in high-end ADAS/LiDAR/HUD markets (esp hybrid auto lens), 3) opportunities in visual inputs and edge AI (AI phone, robotics).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Sunny Optical (2382 HK) - High-End Upgrade to Accelerate in 2H24E

<ul><li>Sunny Optical (Sunny)’s FY23 net profit was largely in-line with profit warning, but 2H23 GPM of 14.1% (vs 19% in 2H22) was below expectations due to more intense competition despite spec upgrade and more high-end models in 2H23.</li><li>For 2024 guidance, while mgmt. is conservative on HCM/HLS/VLS shipment, Sunny is positive on smartphone ASP, high-end HLS ramp-up, stable VLS/XR growth, and better GPM recovery in 2H24E.</li><li>We trimmed FY24/25E EPS by 35%/27% to factor in weak 2023 GPM and conservative guidance. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Sunny Optical (Sunny)’s FY23 net profit was largely in-line with profit warning, but 2H23 GPM of 14.1% (vs 19% in 2H22) was below expectations due to more intense competition despite spec upgrade and more high-end models in 2H23.For 2024 guidance, while mgmt. is conservative on HCM/HLS/VLS shipment, Sunny is positive on smartphone ASP, high-end HLS ramp-up, stable VLS/XR growth, and better GPM recovery in 2H24E.We trimmed FY24/25E EPS by 35%/27% to factor in weak 2023 GPM and conservative guidance. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Sunny Optical (2382 HK) - Expectations Reset on Conservative Guidance; Maintain HOLD

<ul><li>Sunny reported a FY23E profit warning with earnings decline of 50-55% YoY, 23%/18% below our/consensus estimates on weak smartphone demand, intense competition, and the de-spec trend.</li><li>While we remain positive on Android recovery, gains of share of supply to Apple, and spec upgrade in FY24E, we believe consensus estimates are too bullish on margins and ASP recovery.</li><li>We cut FY24/25E EPS by 20%/19% to factor in the results miss and slower ASP/margin recovery in FY24-25E.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Sunny reported a FY23E profit warning with earnings decline of 50-55% YoY, 23%/18% below our/consensus estimates on weak smartphone demand, intense competition, and the de-spec trend.While we remain positive on Android recovery, gains of share of supply to Apple, and spec upgrade in FY24E, we believe consensus estimates are too bullish on margins and ASP recovery.We cut FY24/25E EPS by 20%/19% to factor in the results miss and slower ASP/margin recovery in FY24-25E.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Sunny Optical (2382 HK) - 2023 Profit Warning Worse than Feared

China

Zhejiang Dahua Technology Co., Ltd. researches, designs and manufactures security and surveillance equipments. It also modular-designs both hardware and software with flexibility for different configurations, various scales of applications and future expansion.

WUS Printed Circuit (Kunshan) Co., Ltd produces and sells electrical equipments and related products.  The Company's products include double-side circuit board, multi-layers circuit board, and connector for electrical equipments.

Wus Printed Circuit (Kunshan) Co,Ltd. (002463 CH)

AAC Technologies Holdings Inc designs, develops and manufactures a broad range of miniaturized components that include speakers, receivers and microphones in the acoustic segment and others such as haptics vibrators, RF and antennas, and optical lenses. AAC's products are found in mobile devices such as smartphones, tablets, wearables, ultrabooks, notebooks and electronic book-readers.

Universal Scientific Industrial (Shanghai) Company Limited develops, procures, manufactures, provides logistics and maintenance services. The Company's main product types include communications, computer and storage, consumer electronics, industrial, and other related types.

Universal Scientific Industrial (Shanghai) (601231 CH)

Universal Scientific Industrial (Shanghai)

Unigroup Guoxin Co., Ltd., formerly Tongfang Guoxin Electronics Co., Ltd., is a China-based company, principally engaged in the design and distribution of integrated circuits (ICs). The Company's IC products consist of smart card chips, special IC products and memory chips. In addition, the Company also engages in the development, manufacture and distribution of quartz crystal components. The Company distributes its products within domestic market and to overseas markets.

Shengyi Technology Co., Ltd. manufactures and markets electronic components. The Company's products include copper coated panels, printed circuit boards, and other related products.

Lingyi iTech (Guangdong) Company manufactures magnetic material components. The Company develops, produces, and distributes ferrite permanent magnet components, ferrite soft magnet components, and other magnetic material components. Lingyi iTech (Guangdong) markets its products worldwide.

Chaozhou Three-Circle Group Co. Ltd. manufactures advanced ceramics. The Company researches, develops, produces, and sells ceramic ferrules, sleeves, substrates, capacitors, and other ceramic products. Chaozhou Three-Circle Group provides its products for optic telecommunication, machinery, environmental protection, and new energy industries.

Victory Giant Technology (Huizhou) Co., Ltd. manufactures electronic products. The Company specializes in high-density PCB development, production and sales.

Shennan Circuits Co.,Ltd. manufactures printed circuit boards. The Company produces packaging base plates, substrates, electronic assemblies, system in package, and other products. Shennan Circuits markets its products across worldwide.

Samsung Electro-Mechanics Co., Ltd. manufactures a variety of electronic components used in computers, audio and video products, industrial electronics, and telecommunication equipment. The Company's products include multi-layer boards and capacitors, optical Pick Ups, deflection yokes (DY), keyboards, speakers, and light emitting diode (LED) products.

Samsung Electro Mechanics Co, Ltd. (009150 KS)

Jentech Precision Industrial Company Ltd. provides tooling, precision metal stamping, custom insert molding, injection molding, and assembly solutions for medical, consumer electronics, semiconductor, automotive, appliance, and micro electronic markets to a wide variety of industries.

YASKAWA Electric Corporation manufactures and markets servomotors, controllers, inverters, and industrial robots.  The Company's products include spindle controllers, computerized numerical control (CNC) systems, and system engineering.

Insight Enterprises, Inc. offers information technology hardware, software, and services to large enterprises, small to medium sized businesses, and public sector institutions in North America, Europe, the Middle East, Africa, and Asia-Pacific.

FPT Corp is an information and communication technology company. The Company provides services in mobile distribution, systems integration, software outsourcing and development, Internet and e-media content, and computer assembly.

Dolby Laboratories Inc. develops audio signal processing systems for the motion picture, broadcasting, and music recording industries, as well as the consumer market.

Innolux Corporation manufactures TFT-LCD, LCD models and LCD monitors. The company also provides research, development, manufacturing and retails business.

LOTES Co., Ltd specialize in design and manufacture of connectors, CPU Socket, Coolers and Antenna for Notebook Computer, Personal Computer, Mobile electronic device and Ditial Video.

Arrow Electronics, Inc. distributes electronic components and computer products to industrial and commercial customers.  The Company distributes a variety of products including computer systems, peripherals, software, and mass storage products to original equipment manufacturers and commercial customers worldwide.

AU Optronics Corp. manufactures and markets thin film transistor-liquid crystal displays (TFT-LCDs) and plasma display panels (PDPs).  The Company sells its products in Taiwan and exports worldwide.

Sunny Optical Technology Group Co., Limited designs and manufactures optical and optical related products. The Company's products include glass/plastic lenses, prisms, mobile phone camera modules, microscopes, surveying instruments, and other analytical instruments.

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Sunny Optical Technology Group (2382 HK)

Sunny Optical (2382 HK) - Positive Profit Alert Alleviates GPM Concerns; Upgrade to BUY

We revised up our FY24-25E EPS by 46-82% to reflect stronger GPM, iPhone share gain (18%/25% in 2024/25E, vs 15% in 2023), iPhone order wins (front...

CMB International

Sunny Optical (2382 HK) - Positive on High-End Upgrade

Overall, we believe Sunny will benefit from the next AI-driven spec upgrade cycle given its technology leadership, strong product roadmap and...

CMB International

Sunny Optical (2382 HK) - High-End Upgrade to Accelerate in 2H24E

Overall, while shipment guidance remained unchanged, we are encouraged by Sunny’s positive view on smartphone recovery and accelerated upgrade in...

CMB International

Sunny Optical (2382 HK) - Expectations Reset on Conservative Guidance; Maintain HOLD

Sunny Optical (Sunny)’s FY23 net profit was largely in-line with profit warning, but 2H23 GPM of 14.1% (vs 19% in 2H22) was below expectations due...

CMB International

Sunny Optical (2382 HK) - 2023 Profit Warning Worse than Feared

Sunny reported a FY23E profit warning with earnings decline of 50-55% YoY, 23%/18% below our/consensus estimates on weak smartphone demand, intense...

CMB International

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