Sunny Optical’s Better Apple Outlook Offsets Tamer Vehicle Lens Growth; Maintain HKD 125 FVE

We held our fair value estimate for Sunny Optical at HKD 125 following the company’s mixed 2022 second-half results as stronger Apple-related growth offset weaker-than-expected 2023 vehicle and metaverse-related guidance. Increasing involvement in Apple’s supply chain should be a boon for Sunny in shipment volume and pricing. Its shares are still undervalued as Apple, vehicles, and the metaverse remain the most significant growth drivers, in addition to the recovery in demand for Chinese smartphones.