Stock Idea Why investors should set their sights beyond sh | FSMOne SG - Research Highlights

Stock Idea

Why investors should set their sights beyond short-term headwinds for Sunny Optical

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• Despite its poor share price performance, we believe that Sunny Optical remains fundamentally sound and we still see a long runway of growth ahead for the company.

• The trend of specifications downgrade in smartphones is likely to continue in 1H22, but may start to improve in 2H22 based on customer feedback. 

• Sunny Optical will benefit from the strong growth in its vehicle-related shipments as more ADAS solutions are commercialised and adopted by car manufacturers.

• We believe there is a clear mismatch in fundamentals and valuations at this current share price level.

• Based on a fair PE of 25X, our revised target price of HKD 190 still commands a tremendous upside potential of over 60%.

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: Sunny Optical (HKEX:2382)