<News Alert> 32M-and-above CCM shipments increased 29% y-o-y in Jun, in line
- Shipments of 32 megapixels-and-above CCMs in Jun 2023 increased by 29.4% y-o-y, in line with market expectations
- The solid performance reaffirms our positive view on the company’s product premiumisation, which is expected to contribute to 2H23’s growth
- Maintain BUY, expect revenue growth to accelerate to 39% y-o-y in 2H23
The performance of Jun 2023 camera module (CCM) shipments was in line with market expectations. Total CCM shipment volume in Jun 2023 declined 17.0% y-o-y (vs. a 12.8% y-o-y decline in May 2023) due to the prolonged softness in smartphone demand. 32 megapixels-and-above CCM shipments increased by 29.4% (vs. a 6.9% increase in May 23). 1H23 32 megapixels-and-above CCM shipments increased by 3.0% y-o-y, reversing the 1.4% decline in 5M23. This performance indicates a continuing premiumisation trend in optics components. Shipments of CCMs for other fields, including vehicle CCMs, rose 44.7% y-o-y but remained on a very limited scale.
Expect neutral share price reaction due to in-line shipments. The increase in high-end module shipments reaffirms our positive view on the company’s product premiumisation. We expect the company’s premiumisation strategy to contribute to 2H23’s growth by raising ASP and profit margins. Additionally, we expect a modest recovery in CCM shipments in 2H23, backed by improving consumer sentiment. We project a 39% y-o-y growth in revenue in 2H23. The stock trades at 7.8x FY23F PE, vs. a historical average of 14.3x. Maintain BUY with TP of HK$5.8.