News Alert – Share price dropped 11% yesterday on market downgrades
- Sunny Optical‘s share price dropped 10.5% yesterday to a three-year low
- The share price decline was mainly due to the weakened market sentiment caused by market downgrades
- Expect share price to remain volatile in the near term due to weakened market sentiment
- Yet management shipment guidance unchanged and long-term driver intact
What’s New
– Sunny Optical (2382 HK)’s share price dropped 10.5% yesterday to a three-year low.
– The share price decline was mainly due to the concerns on smartphone shipment and recent downgrades on the street.
– Market views are turning more negative on the smartphone shipment and supply chain, with some expecting the downturn to last until 1H23.
– Management shipment guidance remain unchanged.
Our View:
– We expect the share price to remain volatile in the near term due to the weakened market sentiment.
– Despite the weak smartphone shipment outlook in the near term, we think the long-term drivers for Sunny Optical, such as its rising penetration into the value chain or new iPhone models, remain intact.
– The share price has dropped 65.8% YTD and is at an FY22F PE of 22.6x, compared with its five-year historical average of 28.5x.
– We maintain BUY, TP HK$ 144.2.