Affected by the sluggish demand in the smart phone market, the global optical leader Sunny Optical Technology (02382. HK) saw its first decline in operating income since its listing in 2021.
According to the annual performance report released by Sunny Optical Technology, in 2021, Sunny Optical Technology achieved revenue of 37.497 billion yuan, down 1.3% year-on-year; achieved a net profit attributable to shareholders of listed companies of 4.99 billion yuan, an increase of 2.4% year-on-year.
Sunny Optical Technology said that the decline in revenue in 2021 is mainly due to the decline in shipments of mobile phone lenses, as well as the decline in the average sales unit price of mobile phone lenses and mobile phone camera modules.
At that time, although the on-board camera business of Sunny Optical Technology for more than ten years has become a new market flashpoint, and the shipment volume has become the first in the world, the current automotive electronics market is relatively scattered, and is facing huge market competition, technological upgrading and other pressures.
In the short term, vehicle-related products cannot yet drive the revenue growth of Sunny Optical Technology. Before the in-vehicle business has officially taken over the mobile phone business, the performance growth of Sunny Optical Technology may continue to be under pressure.
Encounter performance "bottleneck"
The achievements of Sunny Optical Technology have mainly benefited from the development wave of smart phones. But it has to be admitted that the golden age of smart phones has ended, the market has entered a saturation period, and the performance of Sunny Optical Technology has also encountered a bottleneck.
The main business segments of Sunny Optical Technology include mobile phone related products, vehicle-related products, AR and VR related products, digital camera related products, etc. Among them, mobile phone-related products are the largest business segment of Sunny Optical Technology, and the operating income in 2021 is 29.598 billion yuan, down 7.85% year-on-year (32.119 billion yuan in 2020), accounting for 78.93% of the total revenue of Sunny Optical Technology.
Vehicle-related products have become the second largest business segment of Sunny Optical Technology, with revenue reaching 2.961 billion yuan in 2021, an increase of 19% year-on-year. Among them, the shipment of in-vehicle lenses was 67.98 million, an increase of 21% year-on-year, and continued to maintain the position of the world's first market share.
From the perspective of regional distribution of income, China is the main battlefield of Sunny Optical Technology, accounting for more than 80% of revenue. In 2021, Sunny Optical Technology's revenue from the Chinese market reached 28.88 billion yuan, down 8.54% year-on-year (31.578 billion yuan in 2020), while the revenue of other regions such as Asia (excluding the Chinese market) and Europe showed a year-on-year growth trend.
It is understood that The customers of Sunny Optical Technology in the smartphone camera module market cover Huawei, Xiaomi, Samsung, OPPO and other head smartphone brands, occupying 30% of the Android market.
According to the financial report, the revenue of Sunny Optical Technology from the top three customers reached 18.423 billion yuan, accounting for 49.13% of the total revenue. It is understood that the high-end lens of Sunny Optical Technology is mainly supplied to Huawei, which is Huawei's long-term main supplier, and Huawei also contributes nearly 30% of the revenue of Sunny Optical Technology.
However, under the background of the saturation of the smartphone industry, Huawei's smartphone (high-end model) sales in 2021 have dropped sharply, resulting in poor sales of high-end models of Sunny Optical Technology.
In addition, it should be specially mentioned that although Sunny Optical Technology entered the Apple supply chain in 2021, Sunny Optical Technology lagged behind Daliguang (Apple's largest supplier) in terms of share, and it was difficult to have a significant increase in shipments.
In fact, the lack of performance growth of Sunny Optical Technology has been reflected as early as 2020. In 2020, the operating income of Sunny Optical Technology was 38 billion yuan, an increase of only 0.3% compared with 2019.
In order to find a new growth point, Sunny Optical Technology has extended its business focus from mobile phones to high-pixel car lenses. However, can the rapid development of intelligent electric vehicles bring a new "highlight moment" to Sunny Optical Technology?
Can the in-vehicle business drive performance growth?
In the short term, it is difficult for the in-vehicle business to support the revenue growth of Shunyu Optical Technology, which has a market value of 100 billion.
On the one hand, although Sunny Optical Technology has a good development in the fields of on-board lenses and on-board modules, and the revenue of on-board related products increased by 19% year-on-year last year, the revenue of this business accounted for only 8%, and the overall contribution to operating income was relatively small.
On the other hand, at present, the competition in the car lens market has been extremely fierce. With the upgrading of product specifications from the traditional 1.2 million pixels and 2 million pixels to 5 million and 8 million pixels, the old pattern of the entire car camera industry has also begun to be broken, including Lianchuang Electronics, Hongjing Optoelectronics, OFILM, Qiu Ti Technology and other vehicle camera industry chain enterprises are impacting the traditional status of Sunny Optical Technology.
For example, last year, Lianchuang Electronics' automotive image module won the fixed point of 7 8M ADAS automotive image modules of Weilai ET7 models, and a number of high-end ADAS automotive imaging modules developed for Mobileye and Lianchuang Automotive Electronics have won the bid and signed fixed-point contracts. In addition, the company successfully developed and won the bid in 2020 5 Tesla next-generation in-vehicle optical products will be on the volume.
According to the data, Sunny Optical Technology has achieved the world's first position on the on-board lens, and the main customers are Valeo, Bosch, Continental, Magna and other Tier1 giants and Mobileye and other ADAS solution providers. Among them, Mobileye's car lens is jointly provided by Sunny Optical Technology and Lianchuang Electronics.
Some insiders revealed that the reason why Sunny Optical Technology is strong is largely because of the higher share of Mobileye, and more before EQ3. In the era of EQ5 and EQ6 series chips, the pressure from Mobileye will increase.
According to the announcement released by Lianchuang Electronics, Lianchuang Electronics has passed the verification of a number of lenses in Mobileye's EQ5 and EQ6 series. Among them, the EQ5 scheme has about 8 lenses, and Lianchuang Electronics has passed all of them, far exceeding Shunyu Optical Technology.
Undoubtedly, Lianchuang Electronics will be the biggest competitor of Sunny Optical Technology. In addition to Mobileye and NVIDIA, Lianchuang Electronics also has a share of more than 70% in Huawei, and is expected to be upgraded to a Tier 1 supplier of Tesla in 2022.
It is worth noting that as the automotive electrical and electronic architecture begins to evolve to the centralized, due to the less autonomous space of the Mobileye solution, NVIDIA, Qualcomm, Horizon, etc. are grabbing Mobileye's market share. For example, the new models of car companies including Weilai, Xiaopeng, and Ideal have not initially switched from Mobileye to NVIDIA, while GM, Great Wall, and BMW have also begun to choose Qualcomm solutions.
Meanwhile, Mobileye's Tier1 partner camp is also disintegrating. Previously, ZF, Valeo and other Tier1 perception solutions for the front-loading market were based on Mobileye's chips and underlying algorithms, but at present, including ZF, they have chosen the solutions of other companies.
In addition, Sunny Optoelectronics Technology not only provides car cameras, but also provides car camera modules. According to the financial report, Sunny Optical Technology has achieved mass production of a variety of environment-aware vehicle modules, including 1.7 million, 2 million, 5 million and 8 million pixels. Among them, the 8-megapixel vehicle module adapted to the Horizon, Mobileye and NVIDIA platforms has been fixed by more than 10 customers.
In response to this, some insiders said that in the future, Sunny Optical Technology will also face problems such as how to divide the work between the car lens and its car module, and the direct competitive relationship between the car module and its car lens customers, which may also have a certain impact on its performance.
Although the vertical integration mode of cameras and modules of Sunny Optical Technology can communicate directly with car manufacturers, algorithm companies and domain controller manufacturers through modules, it is conducive to product development layout and market card slots in advance. However, it is revealed that the current vehicle module business of Sunny Optical Technology has caused a certain impact on its car lens business, and many car camera module companies have deliberately avoided the lens of Sunny Optical Technology when selecting models.
"In the ADAS system, the parameters of the lens are strongly correlated with the algorithm training. After the general selection of cameras, OEMs and algorithm companies rely on lenses far more than modules. The above-mentioned industry insiders added.
Overall, the current layout of Sunny Optical Technology's car lens, car module, lidar, HUD and other tracks have just begun, and huge amounts of money will need to be invested in research and development in the future. Therefore, Sunny Optical Technology also needs the original business to deliver "ammunition", but now the original business (smart phone) revenue has declined.
At the same time, according to the shipment data released by Sunny Optical Technology, in the first quarter of this year, affected by the shutdown caused by the epidemic, the shipment of on-board lenses of Sunny Optical Technology was 19.047 million, down 3% year-on-year. Among them, the shipment of in-vehicle lenses in March was 5.849 million units, down 9.9% year-on-year.
According to the goal of Sunny Optical Technology, the operating income will exceed 100 billion yuan by 2025. However, from the current point of view, Sunny Optical Technology is still far from this goal, and the future performance growth is still facing great uncertainties.