External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

Sunny Optical Technology / Equity Bottom-Up

<ul><li>We are positive on post-destocking shipment recovery and industry-wise spec upgrade trend driven by recent Huawei/Apple flagship models (Mate Pro 60/ iPhone 15 Pro Max).</li><li>For Sunny, we also expect blended ASP recovery, Apple/ Huawei order wins and easing competition to drive earnings in 2H23/2024.</li><li>However, in the near term, we believe recent stock rallies have factored in these positives, and Sunny’s Sep HLS/HCM shipment growth of 17%/41% YoY was largely in-line mainly on Apple/Huawei restocking and low base vs 2022. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We are positive on post-destocking shipment recovery and industry-wise spec upgrade trend driven by recent Huawei/Apple flagship models (Mate Pro 60/ iPhone 15 Pro Max).For Sunny, we also expect blended ASP recovery, Apple/ Huawei order wins and easing competition to drive earnings in 2H23/2024.However, in the near term, we believe recent stock rallies have factored in these positives, and Sunny’s Sep HLS/HCM shipment growth of 17%/41% YoY was largely in-line mainly on Apple/Huawei restocking and low base vs 2022. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Sunny Optical (2382 HK) – Positive on Shipment Recovery and Upgrade Trend

<ul><li>While we expect HLS/HCM shipment to recover sequentially into 2H23E driven by channel restocking and major clients’ order ramp-up, we believe 2H23E margin recovery will be slower-than-expected, dragged by limited spec upgrade and slow utilization recovery.</li><li>We revised down FY23-25E EPS by 9-18% to reflect 1H23 results and more conservative margin estimates.</li><li>We maintain our positive view on automobile/XR upside, but we believe a bumpy 2H23 will remain an overhang for the stock. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

While we expect HLS/HCM shipment to recover sequentially into 2H23E driven by channel restocking and major clients’ order ramp-up, we believe 2H23E margin recovery will be slower-than-expected, dragged by limited spec upgrade and slow utilization recovery.We revised down FY23-25E EPS by 9-18% to reflect 1H23 results and more conservative margin estimates.We maintain our positive view on automobile/XR upside, but we believe a bumpy 2H23 will remain an overhang for the stock. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Sunny Optical (2382 HK) – Expect Shipment Recovery on Track in 2H23E

<ul><li>While Sunny’s 1H23 net profit decline of 68% YoY is in-line with our estimate and its profit warning (down 65-70% YoY), its 1H23 GPM of 14.9% is well below our/consensus estimate of 17.2%/17.1%, given demand weakness, lower utilization and de-spec trend.</li><li>We expect 2H23E HCM/HLS shipment will recover YoY/QoQ given restocking and low base effect in 1H22, but margin will remain under pressure given slow demand recovery and limited spec upgrade.</li><li>In the long term, we are positive on auto/LiDAR/HUD/AR/VR to drive future growth. Trading at 36.5x/23.1x FY23/24E P/E, we think the stock is fairly valued. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

While Sunny’s 1H23 net profit decline of 68% YoY is in-line with our estimate and its profit warning (down 65-70% YoY), its 1H23 GPM of 14.9% is well below our/consensus estimate of 17.2%/17.1%, given demand weakness, lower utilization and de-spec trend.We expect 2H23E HCM/HLS shipment will recover YoY/QoQ given restocking and low base effect in 1H22, but margin will remain under pressure given slow demand recovery and limited spec upgrade.In the long term, we are positive on auto/LiDAR/HUD/AR/VR to drive future growth. Trading at 36.5x/23.1x FY23/24E P/E, we think the stock is fairly valued. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Sunny Optical (2382 HK) – 1H23 First Take: In-Line with Profit Warning

Apple Hospitality Reit / Equity Bottom-Up

<ul><li>Apple reported FY3Q23 (CY2Q23) results with EPS of US$1.26 (+5% YoY) and revenue of US$81.8bn (-1.4% YoY), which are 5% and 0.3% above consensus, mainly driven by record revenue from Service, offsetting sluggish iPhone/Mac /iPad sales.</li><li>Looking into FY4Q23E, mgmt. expects revenue to show similar YoY revenue decline (-1% YoY), while iPhone/services will accelerate YoY growth and iPad/Mac will post double-digit decline.</li><li>Given resilient outlook and iPhone’s share gain amid macro headwinds, we remain positive on Apple supply chain over Android camp in 2H23E with upcoming catalysts from iPhone 15 launch in Sep. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Apple reported FY3Q23 (CY2Q23) results with EPS of US$1.26 (+5% YoY) and revenue of US$81.8bn (-1.4% YoY), which are 5% and 0.3% above consensus, mainly driven by record revenue from Service, offsetting sluggish iPhone/Mac /iPad sales.Looking into FY4Q23E, mgmt. expects revenue to show similar YoY revenue decline (-1% YoY), while iPhone/services will accelerate YoY growth and iPad/Mac will post double-digit decline.Given resilient outlook and iPhone’s share gain amid macro headwinds, we remain positive on Apple supply chain over Android camp in 2H23E with upcoming catalysts from iPhone 15 launch in Sep. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Apple FY3Q23 In-Line on Record-High Service Offsetting Soft IPhone/Mac/IPad Sales

<ul><li>Sunny announced a 1H23 profit warning, stating 1H23 net profit of RMB407- 475mn, down 65-70% YoY.</li><li>The midpoint is 64%/60% below our/consensus estimates, mainly due to 1) a non-cash FX loss of RMB161.5mn on US$400mn/ 277mn USD bonds/loans, 2) smartphone demand weakness, and 3) ASP/margin pressure on camera de-spec. We trimmed FY23-25E EPS by 4-38% to reflect 1H23 results and slower margin recovery.</li><li>While we are positive on Sunny’s 2H23E earnings recovery and non-smartphone outlook, we think the stock is fairly valued at 39.3x/24.9x FY23/24E P/E. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Sunny announced a 1H23 profit warning, stating 1H23 net profit of RMB407- 475mn, down 65-70% YoY.The midpoint is 64%/60% below our/consensus estimates, mainly due to 1) a non-cash FX loss of RMB161.5mn on US$400mn/ 277mn USD bonds/loans, 2) smartphone demand weakness, and 3) ASP/margin pressure on camera de-spec. We trimmed FY23-25E EPS by 4-38% to reflect 1H23 results and slower margin recovery.While we are positive on Sunny’s 2H23E earnings recovery and non-smartphone outlook, we think the stock is fairly valued at 39.3x/24.9x FY23/24E P/E. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Sunny Optical (2382 HK) – 1H23 Profit Warning Worse than Feared

China

Sunny Optical Technology (Group) Co., Ltd. is a leading global manufacturer of integrated optical components and products. The company designs, researches, develops, manufactures, and sells optical and optical-related products, including lenses for handsets, vehicles, and security, as well as camera modules, vehicle modules, microscopes, and intelligent inspection equipment. It is headquartered in Yuyao, Zhejiang, China, and was founded in 1984.

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Sunny Optical Technology (2382 HK)

Sunny Optical (2382 HK) – Positive on Shipment Recovery and Upgrade Trend

We are positive on post-destocking shipment recovery and industry-wise spec upgrade trend driven by recent Huawei/Apple flagship models (Mate Pro...

CMB International

Sunny Optical (2382 HK) – Expect Shipment Recovery on Track in 2H23E

We maintain our positive view on automobile/XR upside, but we believe a bumpy 2H23 will remain an overhang for the stock.

CMB International

Sunny Optical (2382 HK) – 1H23 First Take: In-Line with Profit Warning

In the long term, we are positive on auto/LiDAR/HUD/AR/VR to drive future growth. Trading at 36.5x/23.1x FY23/24E P/E, we think the stock is fairly...

CMB International

Apple FY3Q23 In-Line on Record-High Service Offsetting Soft IPhone/Mac/IPad Sales

Apple reported FY3Q23 (CY2Q23) results with EPS of US$1.26 (+5% YoY) and revenue of US$81.8bn (-1.4% YoY), which are 5% and 0.3% above consensus,...

CMB International

Sunny Optical (2382 HK) – 1H23 Profit Warning Worse than Feared

While we are positive on Sunny’s 2H23E earnings recovery and non-smartphone outlook, we think the stock is fairly valued at 39.3x/24.9x FY23/24E P/E.

CMB International

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