In a report released today, Johnny Yum from UOB Kay Hian maintained a Buy rating on Sunny Optical Technology (Group) Co (SNPTF – Research Report), with a price target of HK$100.00.
Johnny Yum’s rating is based on several key factors that highlight the potential growth and stability of Sunny Optical Technology. One of the primary reasons for the Buy rating is the company’s relatively low exposure to tariffs, which is around 6-8% of its revenue. This low exposure is particularly advantageous compared to other players in the Apple supply chain, as it minimizes the impact of trade tensions. Additionally, Sunny Optical’s procurement strategy, which involves sourcing components from a diverse range of countries including China, Japan, and Europe, further mitigates the risk of tariff-related disruptions.
Another factor contributing to the Buy rating is the positive outlook for Sunny Optical’s vehicle business. The company has projected a 15-20% increase in shipment volume for vehicle lens sets and a 40% revenue growth for vehicle camera modules. Although some investors consider these projections conservative, they still indicate a strong growth trajectory, especially given the global market’s expected single-digit growth. This growth is supported by the increasing penetration of autonomous driving technologies, positioning Sunny Optical favorably in the market.