CICC: Maintains SUNNY OPTICAL (02382) Outperform Rating with a target price of HK$99.2.

CICC released a research report stating that due to better-than-expected sales of mobile optical products, they have raised SUNNY OPTICAL's (02382) 2025/2026 net profit attributable to the parent company by 4%/6% to 37.7/45.0 billion yuan. The current stock price corresponds to a 2025/2026 P/E ratio of 21.3x/17.6x. They maintain an outperform industry rating and a target price of 99.2 Hong Kong dollars, corresponding to a 2025/2026 P/E ratio of 26.4x/21.8x, which represents a 24.1% increase from the current stock price. Key points from the CICC report: SUNNY OPTICAL announced September shipment data 1) Mobile optics: Shipment of mobile camera modules was 48.524 million units, up 32.0%/15.3% month-on-month/year-on-year due to increased customer demand. Shipment of mobile lenses was 118 million units, down 1.0%/1.9% month-on-month/year-on-year due to product structure adjustments. 2) Vehicle-related products: Shipment of vehicle lenses was 11.66 million units, up 25.2%/15.8% month-on-month/year-on-year. With the Android stocking season approaching, the sales of mobile optical products are improving year-on-year In terms of mobile camera modules, the company's September shipments were up 32.0% year-on-year, showing a significant improvement compared to January-August year-on-year trends. The CICC believes that this is mainly due to the low base from last year and the generally advanced stocking pace of Android customers. Xiaomi released new phones a month earlier this year, and fellow Huatai's September shipments also increased by 40.5% year-on-year, possibly for the same reason. As for mobile lenses, the year-on-year trend for September shipments improved compared to the previous month, mainly due to the impact of Android stockpiling season and Apple's new phone release. However, due to the company's increased focus on high-end products compared to last year, there was still a slight decrease in shipments year-on-year. Considering the company's continued strategy of optimizing product structure, the CICC expects the ASP and gross profit margin of mobile optical products to improve year-on-year. The expansion of the automotive optical market is steadily progressing, and the leading AR waveguide company has reached a cooperation In terms of automotive, the company's shipments of vehicle lenses from January to September increased by 23% year-on-year, in line with trends in the intelligent driving industry. The CICC continues to be optimistic about the increase in the penetration rate of high-end intelligent driving, which will bring growth in the number and specifications of cameras per vehicle, and the company, as a global leader, is expected to benefit fully. In terms of AR, the company announced on October 9th that it has reached a cooperation agreement with Goertek Inc. If the transaction is completed, Shanghai Orlai will become a wholly-owned subsidiary of Goertek Optical, and Ningbo Orlai will hold 31.31% of Goertek Optical's shares, becoming the second largest shareholder of Goertek Optical. The CICC believes that this move is expected to leverage the resources of both parties and accelerate the mass production of etched diffraction light waveguides. Risk warning: Weak consumer electronics demand, lower-than-expected automotive intelligence, and weak XR demand.