Sunny Optical said Tuesday its net profit for 2023 will be between 1.08 billion yuan and 1.2 billion yuan, a year-on-year decrease of about 50% to 55%.

The latest: Smartphone camera lens maker Sunny Optical Technology (Group) Co. Ltd. (2382.HK) said Tuesday it will report a 2023 net profit of between 1.08 billion yuan ($152 million) and 1.2 billion yuan, down 50% to 55% year-on-year.

Looking up: The company previously reported its net profit fell 66.7% in the first half of last year to 459 million yuan, meaning its profit in the second half ranged between 625 million yuan to 745 million yuan, up sequentially from the first half.

Take Note: The company attributed the sharp profit decline mainly to continued weak global demand for smartphones, intense competition and a longer-term trend of smartphone camera homogenization, pressuring prices and gross profit margins for its products.

Digging Deeper: Founded in 1984, Sunny Optical is a leading manufacturer of integrated optical products and became the first Chinese optical company to be listed in Hong Kong in 2007. It has grown steadily since then on rapid development of the global smartphone market and was selected as a component of the benchmark Hang Seng Index in 2017. But its business peaked in 2021 as the smartphone market hit an inflection point after years of breakneck growth. As that happened, its net profit plunged 51.7% to 2.4 billion yuan in 2022 and fell by nearly half again last year.

Market Reaction: Sunny Optical’s shares plunged on Wednesday to close down 9.8% at HK$48.75 by the midday break, a 52-week low.

Translation by A. Au

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