[ET Net News Agency, 14 September 2020] Morgan Stanley said the sequential recovery in
CCM (compact camera modules) and handset lens shipments has been within expectation,
though pull-in recovery in vehicle lens shipments has come faster than expected.
Looking into 2H, the research house is now more confident that Sunny Optical's (02382)
volume shouldn't see a sharp fall in 4Q, as Morgan's industry checks suggest that volume
from Xiaomi (01810) and OPPO is picking up quickly for the camera module.
Further, some projects may not necessarily carry a lower margin than Huawei's projects,
given Huawei's strong bargaining power in the supply chain thanks to its previous scale.
Morgan also believes that handset lens shipments are more stable thanks to limited
exposure to Huawei, and Samsung has been growing nicely.
It stays "overweight" on Sunny with a price target of HK$150, as it sees management's
strong execution and the company's well-diversified client base. (KL)