[ET Net News Agency, 18 September 2018] UBS Global Research lowered its target price
for Sunny Optical Technology (02382) to HK$128 from HK$150, but upgraded its rating to
"buy" from "neutral".
The research house believes investors are too bearish about the outlook for its camera
module business due to weaker profitability in 1H. UBS lowered its 2018-20 earnings
estimates by 13-19% mainly to reflect weaker margins for camera modules.
However, it expects profitability to improve gradually with the next wave of technology
upgrades (e.g. resolution migration, triple camera, 3D sensing). It expects Sunny's
handset lens to maintain strong growth in 2H and beyond with a larger addressable market
and share gains at the expense of smaller producers. (KL)