＜Research＞Macquarie Elevates SUNNY OPTICAL (02382.HK) TP to $79.2, Expects Continued Margin Recovery in 2H24 & 2025

　　Macquarie highlighted in a report that SUNNY OPTICAL (02382.HK) -1.150 (-2.359%) Short selling $141.27M; Ratio 23.618% issued a positive profit alert, expecting 1H24 net profit to grow 1.4x to 1.5x YoY, reflecting that the company's gross margins are starting to recover. The company reduced its production of handset camera modules by 10% YoY in 2Q24 to focus on higher-margin high-end projects. The broker expected the company's handset camera module margin to increase from 2-3% in 1H23 to 7-8% in 1H24, with double-digit growth in the average selling price of its products.

　　In terms of SUNNY's handset lenses, Macquarie forecasted its gross profit margin to increase from about 14% in 1H23 to about 24% in 1H24, mainly due to the improvement of the Android portfolio and the increase in the iPhone's sales share, and it is expected that gross profit margin will further improve in 2H24.

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　　Macquarie predicted smartphones this year to see AI features and camera upgrades that will attract users to switch to new products, which may drive SUNNY's continued margin recovery in 2H24 and next year. The company is the broker's top pick in the smartphone chain.

　　Macquarie reiterated its Outperform rating on SUNNY, considered its valuation attractive, and raised its target price from $65 to $79.2. It also lifted the company's profit forecasts for 2024/25/26 by 44%, 24% and 18%.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-23 16:25.)

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