JPM Trims Sunny Optical Target to HKD 63 on Lower Profit Forecasts

JPMorgan Chase & Co. trimmed its price target for Sunny Optical Technology Group Co. (2382.HK) to HKD 63 from HKD 75, citing lower profit expectations for the current and upcoming year.

The bank’s analysts noted that continuous optimization of the company's product mix and lens specification upgrades for high-end models are expected to drive growth, according to the report. JPMorgan continues to forecast revenue and profit growth for Sunny Optical in 2026, despite near-term headwinds.

The adjustment follows a 6% reduction in JPMorgan’s operating profit forecast for this year and an 8% cut for next year. The bank maintained its 'Neutral' rating on the shares.

Metric	Previous	New
Rating	Neutral	Neutral
Price Target	HKD 75.00	HKD 63.00
Implied Upside	-	~11.1%

Despite the price target cut, Sunny Optical’s stock rose 6.27% to close at approximately HKD 56.73 in Hong Kong trading. The market's positive reaction suggests investors are weighing the firm's long-term growth prospects in the smartphone sector more heavily than the immediate profit forecast reductions.

JPMorgan's report highlighted management's anticipation of better-than-expected growth in the smartphone business through 2026, supported by a stable increase in average selling prices. This, combined with stable growth in the automotive business and sustainable gross margin improvements, is seen offsetting a decline in the extended reality (XR) division.

The divergence between the lowered price target and the stock's rally points to a complex outlook. The target reduction reflects near-term profit concerns, but the market appears to be pricing in a longer-term recovery story driven by the core smartphone and auto businesses. Investors will be closely watching the company's upcoming earnings releases to see if the optimistic segment trends materialize to justify the stock's current momentum.

This article is for informational purposes only and does not constitute investment advice.