[ET Net News Agency, 28 August 2020] Morgan Stanley lowered its target price for Sunny
Optical Technology (02382) to HK$150 from HK$170 and maintained its "overweight" rating.
The research house said Sunny's Huawei exposure has declined to 20-25% of the camera
module business, or 10% of total profit, much lower than what the market perceives it to
be. Management has been aggressive in diversifying the client base. Samsung will become a
more important client from 2021 onward.
One good example of strong execution is that in 1H, despite Huawei cutting orders by
20%+ in late 2Q, Sunny still managed to deliver strong CCM (compact camera modules) GPM in
1H. Vehicle lens business has been on track for recovery.
Morgan cut its earnings estimates for 2020-22 by 6%, 8% and 8%, respectively, mainly to
reflect the decline in Huawei demand especially in 2021 and beyond. (KL)