Sunny Optical: Plenty Of Drivers, Analysts Go Bullish
By Shuli Ren
In a world that has little growth, Hong Kong-listed camera and auto lens manufacturer Sunny Optical (2382.Hong Kong) is getting a lot of attention lately, not the least because this stock has already soared 43.4% this year.
This blogger saw bullish reports from Nomura Securities and Macquarie Research this morning.
More notable is that Deutsche Bank also joined the club, starting its coverage of Sunny Optical, with a bullish view and 32 Hong Kong dollars price target.
Sunny gained 1.4% this morning to HK$25.65.
Two distinct new tends should push both earnings and valuation higher for Sunny Optical.
First is the adoption of dual-camera modules for high end smartphones, boosting both volume and pricing, where Sunny already holds a top two ranking.
The second is the proliferation of cameras in the auto sector where it is the largest supplier, with a projected 30% market share in a 40% margin product, growing at 30% pa.
This combination should raise earnings 50% this year followed by close to 20% annually until 2018.
We note the company has strong free cash flow and a large net cash position.
Source: Barron's Asia
http://blogs.barrons.com/asiastocks/201 ... o-bullish/