FAST NEWS: Weak smartphone demand hits Sunny Optical

The latest: Smartphone camera producer Sunny Optical Technology (Group) Co. Ltd. (2382.HK) reported on Monday that shipments of its handset lenses plummeted 29.8% year-on-year to 84.33 million units in March, while its handset camera module shipments also dropped 24.1% to 36.39 million units.

Looking up: While handset lens shipments fell significantly year-over-year, they were up by 26.5% and 4.5% compared to January and February, respectively, reflecting a rebound from a trough at the start of the year.

Take Note: The company said the handset lens and camera module declines were mainly due to high bases in the year-ago period, as well as current weak demand in the global smartphone market.

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 the rapid development of the global smartphone market, and was selected as a component of the benchmark Hang Seng Index in 2017. However, its business hit a turning point in 2021 when its revenue fell by 1.3%, marking the first decline in nearly a decade, due to a drop in the volume and price of smartphone cameras and camera modules. The situation further deteriorated last year, with the company’s revenue and net profit falling 11.5% and 51.7%, respectively.

Market Reaction: Sunny Optical shares rose 4.2% in early trading on Tuesday, but later gave back most of those gains and closed up 0.7% at HK$92.80 by the midday break. It now trades in the middle of its 52-week range.

Translation by Jony Ho

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