News Alert: Handset lens sets shipment missed FY21 forecast by 9.5%

  • Handset lens sets and handset camera modules missed our FY21 shipment forecast by 9.5%/1.3% respectively
  • Vehicle lens sets and optoelectronics products beat our full-year expectation by 7.6%/6.6% 
  • The unsatisfactory performance was mainly due to weak smartphone demand and vehicle key components’ shortage in the auto supply chain in 2H21
  • Expect near-term share price pressure

What’s New
– Sunny Optical (2382 HK) announced its Dec 21 shipment volume after market last Friday.

– The handset lens sets declined m-o-m by 2.2%, resulting in a 5.9% drop in FY21 shipment, 9.5% below our expectation.

– The handset camera modules resumed growth by 14.7% m-o-m and 14.6% y-o-y respectively, leading to an increase in FY21’s shipment of 13.6%, slightly missing our forecast by 1.3%.

 – Vehicle lens sets dropped by 3.5% m-o-m and 15.5% y-o-y, beating our full-year forecast by 7.6%, Meanwhile, other optoelectronics products’ (consisting of vehicle camera module) shipment fall 8.4% m-o-m and 1.3% y-o-y respectively, ahead of our forecast by 6.6%. 

-Optical instruments shipment posted 5.1% y-o-y growth despite the m-o-m decline of 32.8%, missing our FY21 projection by 2.3%.

Our View:
– Most operational data miss our FY21 forecast besides vehicles related products. The unsatisfactory performance in shipment is owing to the sluggish growth of global smartphone shipment and the fall in global vehicle sales in 2H21 on the back of the persisted outbreak of covid-19 variants.

– The weaker smartphone demand especially in android models in 2H and chips shortage resulting in delays and cancellation of domestic customer’s smartphone shipment impacted shipment volume of lens set and camera module in 2H.

– The weak vehicle lens set and camera module shipment was due to the shortage of the

key components in the auto supply chain and the strong shipment volume performance brought by the pandemic mitigation in the last report period.

– Near-term share price pressure is expected as FY21 lens set shipment growth falls behind management’s guidance. The impact is temporary and we expected a resumption resumption in global smartphone shipment growth in FY22.

– We maintain a BUY rating with TP at HK$275.0 on the back of global smartphone shipment growth resume and better penetration to iPhone products expectation.