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>While we expect HLS/HCM shipment to recover sequentially into 2H23E driven by channel restocking and major clients’ order ramp-up, we believe 2H23E margin recovery will be slower-than-expected, dragged by limited spec upgrade and slow utilization recovery.</li><li>We revised down FY23-25E EPS by 9-18% to reflect 1H23 results and more conservative margin estimates.</li><li>We maintain our positive view on automobile/XR upside, but we believe a bumpy 2H23 will remain an overhang for the stock. </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.

While we expect HLS/HCM shipment to recover sequentially into 2H23E driven by channel restocking and major clients’ order ramp-up, we believe 2H23E margin recovery will be slower-than-expected, dragged by limited spec upgrade and slow utilization recovery.We revised down FY23-25E EPS by 9-18% to reflect 1H23 results and more conservative margin estimates.We maintain our positive view on automobile/XR upside, but we believe a bumpy 2H23 will remain an overhang for the stock. 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) – Expect Shipment Recovery on Track in 2H23E

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

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Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

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<ul><li>While Sunny’s 1H23 net profit decline of 68% YoY is in-line with our estimate and its profit warning (down 65-70% YoY), its 1H23 GPM of 14.9% is well below our/consensus estimate of 17.2%/17.1%, given demand weakness, lower utilization and de-spec trend.</li><li>We expect 2H23E HCM/HLS shipment will recover YoY/QoQ given restocking and low base effect in 1H22, but margin will remain under pressure given slow demand recovery and limited spec upgrade.</li><li>In the long term, we are positive on auto/LiDAR/HUD/AR/VR to drive future growth. Trading at 36.5x/23.1x FY23/24E P/E, we think the stock is fairly valued. </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.

While Sunny’s 1H23 net profit decline of 68% YoY is in-line with our estimate and its profit warning (down 65-70% YoY), its 1H23 GPM of 14.9% is well below our/consensus estimate of 17.2%/17.1%, given demand weakness, lower utilization and de-spec trend.We expect 2H23E HCM/HLS shipment will recover YoY/QoQ given restocking and low base effect in 1H22, but margin will remain under pressure given slow demand recovery and limited spec upgrade.In the long term, we are positive on auto/LiDAR/HUD/AR/VR to drive future growth. Trading at 36.5x/23.1x FY23/24E P/E, we think the stock is fairly valued. 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) – 1H23 First Take: In-Line with Profit Warning

Trung Nguyen

Sunny Optical has released H1/23 numbers that were worse than expected in our view, with revenues and earnings below street estimates. Revenues declined 15.9% y-o-y to CNY 14.3 bn. Meanwhile, gross profit dropped 39.5% to CNY 2.1 bn, with a margin of 14.9%. Net profit plunged 68% to CNY 437 mn. A detailed cash-flow statement was not provided. Positively, the financial risk profile and liquidity remain healthy, supported by a large net cash position. Gross Debt/EBITDA rose to 3.9x, which is too high for a Baa1 credit in our view. We note that this has crossed Moody’s 2.0x negative rating trigger, which should cause downgrade pressure to build up.

  Sunny Optical has released H1/23 numbers that were worse than expected in our view, with revenues and earnings below street estimates. Revenues declined 15.9% y-o-y to CNY 14.3 bn. Meanwhile, gross profit dropped 39.5% to CNY 2.1 bn, with a margin of 14.9%. Net profit plunged 68% to CNY 437 mn. A detailed cash-flow statement was not provided. Positively, the financial risk profile and liquidity remain healthy, supported by a large net cash position. Gross Debt/EBITDA rose to 3.9x, which is too high for a Baa1 credit in our view. We note that this has crossed Moody’s 2.0x negative rating trigger, which should cause downgrade pressure to build up. 

Sunny Optical - Earnings Flash - H1 FY 2023 Results - Lucror Analytics

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China

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) – Expect Shipment Recovery on Track in 2H23E

We maintain our positive view on automobile/XR upside, but we believe a bumpy 2H23 will remain an overhang for the stock.

CMB International

Weekly Wrap - 25 Aug 2023

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and...

Lucror Analytics

Sunny Optical (2382 HK) – 1H23 First Take: In-Line with Profit Warning

In the long term, we are positive on auto/LiDAR/HUD/AR/VR to drive future growth. Trading at 36.5x/23.1x FY23/24E P/E, we think the stock is fairly...

CMB International

Sunny Optical - Earnings Flash - H1 FY 2023 Results - Lucror Analytics

Sunny Optical has released H1/23 numbers that were worse than expected in our view, with revenues and earnings below street estimates. Revenues...

Lucror Analytics

Weekly Wrap - 18 Aug 2023

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and...

Lucror Analytics

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