CROSBY Research – Sunny Optical (2382 HK/BUY): FY23 profit warning, expect product mix improvement in FY24

02 Feb 2024

Sunny issued profit warning that net profit may decline 50%-55% YoY in FY23 to Rmb1,084mn-1,204mn, worse than our earning estimation of Rmb1,409mn. The profit warning also implied net profit in 2H23 would range from Rm647mn to Rmb767mn, down by 27-38% YoY. The decline in net profit was attributable to 1) continued weak global demand of smartphone market; 2) intense industrial competition; and 3) prolonged trend of de-spec of smartphone camera, which resulted in the increasing pressure on ASP and GPM of HLS/ HCM products.