野村降舜宇評級和目標價

At least some explanation for Sunny Optical's (2382) drastic selloff Wednesday.

Oppo, Vivo are at risks, cut to Neutral 

Even the giant may need to kneel down in front of the weak demand, wait for better entry point 

Action: Oppo and Vivo are suffering from weak end-demand, cut to Neutral and wait for better entry point 

Sunny’s monthly handset CCM and lens shipment was still quite normal in last month despite of we mentioned that Oppo and Vivo may be the main reasons to potentially drag down Sunny’s competitor, Q tech’s overall production plan in 4Q. But after one month, as discussed in our industry section, we see a more severe demand headwind from Oppo and Vivo’s smartphone across all models, including most popular models R11s and X20. Although we think Sunny can still largely meet the earlier shipment guidance this year (handset CCM shipment to grow 20-25% yoy and handset lens shipment to beat guidance of 45-50% yoy growth), we expect the shipment number in Dec could start to see some weakness. Although Sunny’s stock price has corrected a lot, considering the weaker end demand is likely to cause earnings down ward revision, we still cut Sunny to Neutral with TP HKD110, by using a SOTP methodology based on China peer’s PEG ratio.

野村將舜宇投資評級由買入下調至中性，目標價由145調低至110。該行把舜宇2018/2019年盈利預測從原來的CNY3.83 billion/CNY4.81 billion調低至CNY3.54 billion/CNY4.41 billion。