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INFORMATION TECHNOLOGY | Staff Reporter, Hong Kong
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Why Sunny Optical will benefit from dual camera penetration in China market

41% profit growth could be waiting.

Sunny Optical reported stronger than expected January shipment data, under the CNY effect: 103.6% y-y growth in handset camera module and 88.4% y-y in handset lens, due to market share gain and low-base in last year's number, according to Jefferies report.

Sunny has made a good start to achieving our 15% and 22% y-y volume forecast in module and lens in 2017E, implying 41% earnings growth.

Here's more from Jefferies report:

On 10 February, Sunny Optical reported January shipment data: 1) Handset camera module increased 103.6% y-y and 8% m-m, driven by market share gain in China market (mainly dual camera for Huawei, Oppo/Vivo in our view). Jan-16 camera module number was a low-base, declined 12% y-y, due to product mix shift; 2) Handset lens grew 88.4% y-y or declined 14.2% m-m. Jan-16 lens number was also a low-base, flat growth yy, due to weak demand from its Korean customer; 3) Vehicle lens grew 17.6% y-y or 37.3% m-m.

We think Sunny achieving the strength in camera module reflects Sunny's leading market share in dual camera, especially in the high-end segment, mainly for Huawei Mate 9 and upcoming P10.

We forecast dual camera penetration in China market will increase from 4.9% in 2016E to 18.7% 2017E, benefiting Sunny in terms of: 1) tripling dual camera shipment, and 2) lifting camera module blended ASP by 19.7% y-y to RMB49.9.

This should drive Sunny to maintain 37% and 41% y-y growth in revenue and net profit. 
 

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