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Sunny Optical's handset camera modules shipment soared 52% to 44m units

Competitors must brace for more positive surprises.

According to Maybank Kim Eng, Sunny Optical reported a record high shipment of handset camera modules (HCMs) in April. HCM shipments have risen 52% YoY to 44m units for the year to April, or 19% of our FY13F estimate (in line with our expectations). 

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With its Chinese brand smartphone customers producing more smartphones to meet local demand and Samsung sourcing more components from its new vendor to meet its own production demand, we anticipate that Sunny Optical’s upcoming HCM shipments will surprise the market on the upside.

Consensus has been upgrading earnings estimates since its outstanding FY12 results, and we expect more earnings upgrades following the strong HCM shipments. Its share price has risen 110% YTD and is now trading at 12x our FY13F EPS (16x PER on the market’s FY13F estimates).

We keep our estimates unchanged but raise our TP to a Street-high HKD15 based on 16x FY13F PER (vs 11x before), in line with its peers Largan and Genius, which trade at FY13F/14F PERs of 17x/15x and 18x/16x. We anticipate further re-rating of Sunny Optical on earnings/TP upgrades.  

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