Sunny Optical (02382.HK) shares rose 5.82 percent to HKD70.05 at midday after Daiwa raised its 12-month target price to HKD73 and Citi lifted its target to HKD94. Daiwa also raised 2026-2027 earnings forecasts by 21-27 percent, citing first-half revenue growth and cost control.
Sunny Optical (02382.HK) shares climbed 5.82 percent to HKD70.05 at midday after Daiwa raised its 12-month target price to HKD73 from HKD72.
Daiwa reiterated its "Outperform" rating and lifted earnings forecasts for 2026 to 2027 by 21 percent to 27 percent, reflecting first-half revenue growth and strong cost control execution, the broker said in a report.
The broker's EPS forecasts for 2026 to 2027 run 2 percent to 6 percent above market consensus, driven by a more optimistic view on revenue growth prospects. Citi separately raised its target price to HKD94 with a Buy rating. Sunny Optical's first-half revenue grew 11 percent, driven by automotive, XR and broader IoT businesses, while handset revenue fell 1 percent year over year. Strong growth from major overseas clients supported handset performance, according to management.
Management expects full-year revenue to remain flat year over year and remains cautious on second-half handset shipments because of memory supply constraints. XR revenue growth is expected to accelerate in 2027. Trading volume reached 11.69 million shares with turnover of HKD810 million and a short-selling ratio of 30.784 percent.
The analyst consensus target price for Sunny Optical stands at HK$85.90, implying 29.76 percent upside from the last closing price of HK$66.20. The dual broker upgrades reinforce positive sentiment on the Hong Kong-listed optical components maker, though management's cautious outlook on handset shipments may temper near-term expectations.
The company's pivot toward automotive optics, extended reality and IoT devices is broadening its revenue base beyond the smartphone market, which remains its largest segment. Management's flat full-year revenue guidance suggests handset weakness in the first half is expected to persist, offset by growth in the newer business lines. The memory supply constraints cited by management could also pressure handset shipment volumes in the second half, a factor that may weigh on near-term revenue. Daiwa's more optimistic view on revenue growth, relative to consensus, reflects expectations that the automotive and XR segments will continue to outpace the handset business.
The upgrades from Daiwa and Citi reflect confidence in Sunny Optical's diversification beyond handsets into automotive, XR and IoT. Investors will watch second-half handset shipment data and XR revenue acceleration into 2027 for confirmation of the growth trajectory.
This article is for informational purposes only and does not constitute investment advice.
