Guosen: Maintain the "outperform the market" rating for SUNNY OPTICAL (02382) Improving product structure to drive profitability improvement.

Guosen released a research report stating that it maintains a "better than market" rating for SUNNY OPTICAL (02382), optimistic about the profitability improvement brought by the upgrade of smartphone product structure, as well as the rapid development in the automotive optical and SUN HING VISION fields. It is expected that the net profit attributable to shareholders for the years 2025-2027 will be 37.30/43.33/50.66 billion yuan (previously 34.62/41.24/48.69 billion yuan), with corresponding PE ratios of 22.3/19.2/16.4 times. Key points from Guosen: In the first half of the year, revenue increased by 4.2%, and the profit attributable to shareholders increased by 52.6% year-on-year The company announced its mid-term performance for 2025, with revenue of 19.652 billion yuan in the first half of the year (YoY +4.20%) and a profit attributable to shareholders of 1.646 billion yuan (YoY +52.56%); among which, revenue from optical components was 6.067 billion yuan (YoY +10.70%), accounting for 30.87%; revenue from optoelectronic products was 13.383 billion yuan (YoY +1.46%), accounting for 68.10%; revenue from optical instruments was 0.202 billion yuan (YoY +7.12%), accounting for 1.03%. The overall gross profit margin for the first half of the year was 19.82% (YoY +2.61pct), mainly due to the improvement in the structure of smartphone lenses and camera module products leading to an increase in gross profit margin and faster revenue growth in the high-margin automotive business. High-end smartphone camera upgrades are being driven, and multiple penetration products are being mass produced In the first half of the year, revenue from smartphone-related products was 13.248 billion yuan (YoY +1.68%), accounting for 67.4%. In the period from January to August 2025, 807 million smartphone lenses and 313 million camera modules were shipped. The company's participation in flagship models of mainstream terminal customers continues to increase; mass production of various forms of penetration products has been achieved through the adoption of multi-group system solutions. The company has realized mass production of multi-fold penetration modules and large-aperture penetration modules in flagship models of core major customers; the innovative large-aperture low-load penetration module has been deeply researched and applied in collaboration with top customers. ADAS penetration accelerates growth, driving technological innovation in intelligent driving In the first half of the year, revenue from automotive-related products was 3.4 billion yuan (YoY +18.19%), accounting for 17.3%. In the period from January to August 2025, 86 million automotive lenses were shipped (YoY +22.3%), and the market share of automotive lenses and 8 million pixel automotive modules remained the world's first. The company has completed the research and development of a new generation defogging technology and has applied it to multiple automotive projects; at the same time, it continues to advance the research and innovation of high-pixel glass-plastic hybrid automotive lenses. The company is accelerating the development of overseas markets and has newly obtained fixed-point orders for 8 million pixel products from top European automotive manufacturers. XR enters the fast lane of development, and the application scenarios in the IoT market continue to expand In the first half of the year, revenue from AR/VR-related products was 1.201 billion yuan (YoY +21.07%), accounting for 6.1%. The company will extend the core process technology accumulated in the MR field to the AR product line, realizing mass production of polarizing beam splitter lens groups and successful trial production of virtual imaging lens sheets. The company has achieved full coverage of imaging lenses for mainstream customers in the smart glasses market and continues to maintain a leading market position in the smart glasses imaging module industry. With the significant increase in consumer-grade smart image devices and various types of Siasun Robot & Automation demands, the company has collaborated with key customers to mass produce handheld camera lenses and modules, while achieving further breakthroughs in the areas of navigation, obstacle avoidance, and AI recognition vision in Siasun Robot & Automation.