CROSBY Research – Sunny Optical (2382 HK/BUY): Conservative HLS/ HCM shipment and GPM guidance, but product mix improvement may be upside surprise

25 Mar 2024

After four consecutive declines of its semi-annual revenue, Sunny reported a turnaround of 2H23 revenue with 7.3% YoY growth to Rmb17,403m, driven by HLS/HCM shipment growth of 21.6%/37.3% YoY. GPM in 2H23 shrunk by 4.9ppt YoY to 14.1% on intense competition and prolonged smartphone de-spec trend. 2H23 net profit declined 36.9% YoY to Rmb663m. FY23 net profit declined 54.3% YoY to Rmb1,099m, at the low-end of the profit warning (50-55% YoY decrease). The company proposed HK$0.219 for full year DPS, which represents 20% payout, same as in FY22.