Sunny Optical – announced positive profit alert on Sunday

Yesterday, Sunny Optical announced a positive profit alert, with expectations that its first half 2024 (for the six months ended June 30) net profit to shareholders increase by 140-150% year on year to Rmb 1.05 billion to 1.09 billion, as compared to its profit of Rmb 436.7 million a year ago.

Sunny Optical has been catching up in share price performance in the past three months on the sustained recovery of the China smartphone market and the return of investor interest in the stock. In the past three months, Sunny's share price has increased 35.3% versus a 7.4% gain in the HSI 7.4% (as of 19 July 2024), as well as against peers such as AAC Technologies (+29.7%) and BYD Electronics (+42.8%).

➡️ Sunny expects 150% profit surge for first half of 2024

In a Sunday filing on the Hong Kong Exchange, Sunny’s management attributed the expected increase in net profit to 1) the smartphone market recovery; 2) an improvement in product mix; and 3) rising volumes, ASPs, and gross margin.

The optical products manufacturer reported 1H24 shipment volume of auto lens sets, handset lens sets, and handset camera modules increasing by 13%, 24%, and 14% YoY, respectively, versus the respective full-year shipment growth guidance of 10%, 5%, and flat YoY for the three product lines.

Sunny expects to post final 1H24 results before the end of August.

Meanwhile, Sunny Optical’s share price may be given a short-term boost by potential broker upgrades on the share following its latest profit alert.