[ET Net News Agency, 24 September 2019] UBS Global Research lifted its target price for
Sunny Optical Technology (02382) to HK$145 from HK$125 and maintained its "buy" rating.
The research house raised its 2019-21 earnings estimates on Sunny by 2-16% mainly to
reflect stronger handset lens growth and higher average selling prices (ASPs).
UBS believes the company should benefit from increasing adoption of 40mpx-and-above
handset camera design and further upgrades to its lens product mix. While inventory built
up by Chinese handset OEMs should support strong 3Q shipments for Sunny, UBS believes the
4Q outlook remains uncertain, especially since its biggest customer, Huawei, is still on
the US entity list.
However, it expects Sunny's potential market share gain in the Korean supply chain to
mitigate the risk towards 4Q 2019 and 2020. (KL)