Sunny Optical Technology (Group) Co. Ltd (2382HK): Riding on a new iPhone hype

  • BUY Entry – 235 Target – 260 Stop Loss – 221
  • Sunny Optical Technology (Group) Company Limited is an investment holding company principally engaged in the design, research and development, manufacture and sale of optical and optical related products and scientific instruments. The Company operates its business through three segments: Optical Components, Optoelectronic Products and Optical Instruments. Through its subsidiaries, the Company is also engaged in the research and development of infrared technologies. The Company distributes its products in domestic market and to overseas market.
  • Previously, the company announced 1H21 interim results. Revenue increased by 5.1% YoY to RMB19.8bn. Gross profit jumped by 34.5% YoY to RMB4.9bn. GPM increased 5.4ppts to 24.9% during the period. Net profit jumped by 52.4% YoY to  RMB2.7bn, and NPM was 13.6%. 
  • The company is an Apple-themed stock as it is one of the suppliers to Apple. The upcoming catalyst is Apple’s autumn new product launch on 14th September. On Monday, Apple broke a record high, implying investors are looking forward to the release of the iPhone 13. The positive sentiment could help Sunny Optical break new highs soon. 
  • The updated market consensus of the estimated net profit growth in FY21 and FY22 is 21.2.0% and 23.6% respectively, which translates to 36.6x and 29.6x forward PE. The current PE is 36.7x. Bloomberg consensus average 12-month target price is HK$244.52.