Smartphone selfie demand drives lens shipments for China’s Sunny Optical

Bernstein sets HK$91 price target on shares of mainland’s biggest maker of handset camera modules and lenses

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Girls wearing Chinese flags on their cheeks take selfies in Beijing. Sales of high-resolution smartphone camera lenses have been growing rapidly because of the popularity of dual-camera models and more powerful front cameras for taking selfies. Photo: Reuters

Published: 6:28pm, 10 Jul 2017Updated: 10:55pm, 10 Jul 2017

Sunny Optical Technology, mainland China’s largest manufacturer of smartphone camera modules and lenses, could be poised for a banner year in supplying domestic brands after it reported 81 per cent year-on-year growth in shipments of handset lens sets to 261.6 million pieces in the first half of this year.

That and other developments in the past two months have made some analysts more bullish on Sunny Optical, with Bernstein Research raising its target price for the company’s shares to a market high of HK$91 on Monday.

Founded in the city of Yuyao, Zhejiang province, in 1984 and listed in Hong Kong in 2007, Sunny Optical is a key supplier to major Chinese smartphone brands Huawei Technologies, Oppo and Vivo.

Its main competition is Taiwan-based Largan Precision, the world’s largest maker of handset lens and a major supplier to Apple’s iPhone.

“While Largan is the dominant player in the high-end handset lens market, all smartphone manufacturers want a second supplier, and Sunny Optical fills that gap,” Bernstein senior analyst David Dai told the South China Morning Post. “As the Chinese brands moved to the high-end of the smartphone market in the past few years, Sunny Optical grew along with its customers.”

Global sales of smartphones reached 380 million units in the first quarter, led by Samsung Electronics, Apple, Huawei, Oppo and Vivo, according to research firm Gartner.