DBS: Sunny Optical Technology – BUY TP HK$200

Margin contracted on weaker demand, smartphone growth expected to resume in 2H22

• FY21 net profit increased by 2.4% y-o-y to Rmb 4.9 bn, below market expectations of 6.4% growth
• Cut FY22/23F handset lens shipment growth from 21%/15% to 9%/10% due to weaker smartphone demand
• Reduced FY22/23F net profit by 26%/21% due to lower margins from lens sets and slowed shipment growth 
• Maintain BUY, TP lowered to HK$200; EPS CAGR still strong at 33.2% despite earnings cut