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Investing.com - Jefferies downgraded Sunny Optical Technology Group Co Ltd (HK:2382) (OTC:SNPTF) from Buy to Hold on Wednesday, while raising its price target to HK$85.00 from HK$80.00.
The research firm cited potential headwinds in the company’s core Android smartphone and automotive businesses, despite expected growth in non-Android smartphone segments.
According to Jefferies, Sunny Optical’s non-Android smartphone business is projected to see significant growth with multiple design wins in coming years, with gross profit contribution potentially surpassing Android’s by 2027-28.
Despite this positive outlook, Jefferies expressed concern about weak Android demand and rising bill of materials costs that could pressure the supply chain, along with worrying automotive average selling price and gross margin trends due to OEM pressure and industry competition.
The firm also noted that while AI glasses represent an emerging opportunity, their contribution to large optics suppliers like Sunny Optical may not be meaningful due to limited volume and content value.
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