Some news reported Sunny Optical is said to supply the 7P lens for the rear wide-angle camera of all iPhone 14 series models, and it is expected that 50% to 60% of the Pro series and 55% to 65% of the base model will be equipped with the company’s lenses. The rest of the 7P lens for the rear wide-angle camera will be supplied by Genius and Largan Precision in roughly equal proportions. Furthermore, Sunny Optical may also become the primarily supplier of Lidar lens for iPhone 15 in 2023, replacing Genius as the main supplier
If true, this will likely mark a major breakthrough for Sunny Optical's Apple business.
The original author of this analysis is Kuo Ming Zhi. Ming Zhi is well-regarded as “The Most Accurate Apple Analyst in the World” and “The Analyst Who Reveals all of Apple's Secrets.” in the street, with 80.95% accuracy. Hence, his analysis should be considered carefully. He argued that Sunny Optical's 7p wide lens shipment to Apple will grow significantly due to cost advantage after active production expansion.
Sunny Optical gave a profit warning recently which expects its 1H22 net profit to decrease 45-50% YoY. The decrease was primarily due to weak smartphone demand, de specification of smartphone camera, slower-than-expected growth of vehicle lens and vehicle modules, and unrealised FX loss.
However, we should look beyond the short-term underperformance from weaker Android phone demand. Firstly, Sunny Optical is well positioned to replace Ofilm to supply to Apple, its Apple’s shipment will still be a strong driver for handset lens shipment growth and improving product mix in long term despite the near-term headwind in the Android market. Moreover, due to rising EV and autonomous driving penetration in China, vehicle lens and camera module demand will remain very strong as EV shipment ramped up and the number of cameras per car increase. Together with Ming Zhi’s prediction for the 7p lens, I think Sunny Optical has a huge upside at the current share price of ~110 HKD.
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