BofA lifts Sunny Optical stock target to HK$102, keeps Buy rating

On Wednesday, BofA Securities updated their assessment of Sunny Optical (OTC:SNPTF) Technology Group Co Ltd (2382:HK) (OTC: SNPTF), raising the price target from HK$75.00 to HK$102.00 while maintaining a Buy rating on the stock. The company, currently valued at $12.38 billion, has demonstrated remarkable momentum with an 89.52% return over the past six months. The revision reflects the firm’s anticipation of Sunny Optical’s margin and earnings growth, driven by an increase in automotive momentum, particularly with BYD (SZ:002594), and an improved handset mix due to smartphone subsidies.

The analysts at BofA Securities have revised their earnings estimates for Sunny Optical for the years 2024 to 2026 upwards by 7-15%, and have also introduced their 2027 estimates. This adjustment comes on the heels of a stronger-than-expected profit alert for the second half of 2024, which indicated that the company’s profits were 13% and 8% above BofA’s and consensus estimates, respectively. According to InvestingPro data, the company maintains strong financial health with robust profitability scores and has achieved 18.88% revenue growth in the last twelve months.

The new price target of HK$102.00 is based on 25 times the estimated 2026 earnings per share (P/E), which is a rollover from the earlier valuation that was based on 25 times the estimated 2025 earnings. This change in valuation base is intended to capture the expected stronger automotive momentum extending into 2026.

Sunny Optical’s positive outlook is further supported by the company’s ability to deliver on margins, as evidenced by the recent profit alert. The strategic focus on the automotive sector, particularly the collaboration with BYD, and the optimization of the smartphone product mix are key factors contributing to the company’s robust performance projections.

Investors and stakeholders in Sunny Optical Technology Group Co Ltd can now look to the updated price target and earnings estimates as indicators of the company’s potential trajectory in the coming years, as it continues to capitalize on growth opportunities within the automotive and smartphone industries. InvestingPro subscribers have access to over 10 additional exclusive tips and comprehensive financial metrics that could provide deeper insights into Sunny Optical’s valuation and growth potential.

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