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A Leading Integrated Optical and Optoelectronic
Component Producer
Stock Code: 2382HK
November 2010
1
DisclaimerDisclaimer
The information contained in this presentation is intended solely for your personal reference. Such information is subject to change without notice, its accuracy is not guaranteed and it may not contain all material information concerning Sunny Optical Technology (Group) Company Limited (the “Company”). The Company makes no representation regarding, and assumes no responsibility or liability for, the accuracy or completeness of, or any errors or omissions in, any information contained herein.
In addition, the information contains projections and forward-looking statements that may reflect the Company’s current views with respect to future events and financial performance. These views are based on current assumptions which are subject to various risks and which may change over time. No assurance can be given that future events will occur, that projections will be achieved, or that the Company’s assumptions are correct. It is not the intention to provide, and you may not rely on this presentation as providing, a complete or comprehensive analysis of the Company's financial or trading position or prospects.
This presentation does not constitute an offer or invitation to purchase or subscribe for any securities or financial instruments or to provide any investment service or investment advice, and no part of it shall form the basis of or be relied upon in connection with any contract, commitment or investment decision in relation thereto.
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Table of ContentTable of Content
Investment Highlights1
2
3
4 Outlook and Strategies
Financial Highlights
Company Overview P. 11-12
P. 3-9
P. 17-19
P. 14-15
3
Investment HighlightsInvestment Highlights
Strong recovery in all the three business divisions, margin troughed in 2009:
- beneficiary of rising smartphone and 3G handsets
- greater market share in digital camera divisions
- rising demand growth in high-end optical instrument segments
Improving product mix and client base amid greater operating efficiency and wider application will continue to drive above-industry-average growth
Solid financial position with a net cash of RMB670mn as at the end of June 2010
44
Strong Demand Growth forStrong Demand Growth for ssmartphonemartphoneand 3G Handsetsand 3G Handsets
42,973
62,945
84,301
95,744
63,620
30,190
42,550
54,250
0
20,000
40,000
60,000
80,000
100,000
120,000
2010 2011F 2012F 2013F
3G Handset Smartphone
Surging shipment of handset lensfor 3G handsets thanks to our abilityto produce 2m, 3m, 5m and 8m pixels AF handset lens set and module
Rising popularity of smartphones,95% increased YoY in Q3 to 81Mpcs(Canalys), also boost our handset lens sales
Domestic Shipment of 3G Handsetsand Smartphones (2010 – 2013F)
(units ’000)
Source: iSuppli
55
DoubleDouble--digit Growth in digit Growth in Digital CameraDigital Camera MarketMarket
Strong growth of DSLR (Digital single-lens reflex) camera
Annual shipment volume of DSLRcamera expected to increase continually
Source: MIC
Global Market Forecast of DSLR camera
10.011.5
13.5
17%
15%
11%
0
4
8
12
16
20
2010 2011F 2012F0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
DSLR Growth Rate of DSLR
(units ’mn)
66
Market of high-end opticalinstrument continues to expand
Application to education, medicaland environmental protection, etc, drives the demand of optical instruments
Continuing Growth in HighContinuing Growth in High--endendOptical Instrument MarketOptical Instrument Market
77
Market Forecast of Domestic Video Security System
Wider Application Presents Further Growth Wider Application Presents Further Growth OpportunitiesOpportunities
Vehicle imagingmarket grows fast
Market of securitysurveillance systemgrows relatively fast
Wider applicationof Infraredtechnology
Source: Maxtech International Inc.
43.154.3
65.0
0
20
40
60
80
2010 2011F 2012F
Source: IDC
Market Forecast of Global Infrared Instruments
3,4673,954
4,5495,217
6,177
01,0002,0003,0004,0005,0006,0007,000
2010 2011F 2012F 2013F 2014F
Revenue
(US bn)
(US mn)
Global Market Forecast of Vehicle Camera Lens Module
8,28011,485
16,535
24,965
51.0%
30.4%38.7%
44.0%
0
10,000
20,000
30,000
40,000
2010 2011F 2012F 2013F0%
10%
20%
30%
40%
50%
60%
Volume YoY Growth Rate
(units ’000)
Source: Techno Systems Research
8
Rising shipment of 3M, 5M and 8M pixels AF handset lens set and handset camera modules to top domestic and international brands
Successful development of 3M and 5M pixels 3X Zoom handset lens sets used in high-end smartphone and 3G handsets, an indication of our competitiveness
Commencement of production of glass aspherical lenses enhances core competences
Strong precision molding ability for plastic aspherical lenses will maintain margin expansion
Technology breakthroughs in optical instruments are used in environment protection, biopharmaceuticals, petrochemical and precision measurement fields
WellWell--positioned for Future Growthpositioned for Future Growth
Possessing 78 Patentswith 55 Patents Pending for Approval
9
Strong Client BaseStrong Client Base
Top FiveCustomers Samsung Panasonic BurgeonHuawei ZTE
9
RenownedCustomers
DSCLenses
Business
HandsetLens SetsBusiness
HandsetCamera Modules Business
Optical Instruments
BusinessOther Businesses
SamsungPanasonic
NikonSony
Konica-Minolta PentaxTopconFujinon
OlympusNECLG
Sharp (Nokia)Samsung
Global OpticsFoxconn
Truly
SharpHuawei
ZTELenovoHaier
CoolpadTianyuSangfeiFoxconnGionee
KeyenceCarl Zeiss
OptikaAmscope
PanasonicSanyoLiteonPrimax
MagnaContinental
DelphiAutoliv
Steel-mateTTE
RicohSindohSilitechMicrotek
10
Company Overview
11
Leading Leading IIntegrated ntegrated OOptical and ptical and OOptoelectronic ptoelectronic CComponent omponent PProducer in Chinaroducer in China
Business Segments
Optoelectronic Products(Handset / Notebook cameramodules, Security Surveillance cameras, and other related products)
Optical Components(Glass spherical / asphericalLenses, handset lens set,vehicle lens set, other lens set)
Optical Instruments (Microscopic, measuring and analytical instruments)
Production facilityin Shanghai
Employees: about 158
Zhejiang Headquarters
Employees: about 4,471
Production facilityin Tianjin
Employees: about 220
Production facilityin Zhongshan
Employees: about 2,082
26 years of track recordFully committed management to drive further growth
12
Shareholding StructureShareholding Structure
1) Mr. Wang, the Chairman and an executive Director, holds the entire issued share capital of Sun Ji in favor of all the then Sunny Employeesunder the Sunny Employee Trust
2) Mr. Wang, the Chairman and an executive Director, holds the entire issued share capital of Sun Zhong in favor of the PRC Investorsunder the PRC Investor Trust
3) Ultimate beneficially owned by Chengwei Ventures Evergreen Mgt. LLC4) Ultimate beneficially owned by Investor AB* As at 30 Sept 2010
100.00% 100.00%
7.68% 92.32%100.00%
42.15% 36.26%12.73%1.90%Sun Xu Public Summit (3)CWI (3)
Sun Guang Sun JiPRC Investors (2)
0.82%Sun Zhong
Mr. Wang Sunny Employees (1)
Sunny Optical
6.14%IGC Asia (4)
13
Financial Highlights
14
Financial Overview in 1HFinancial Overview in 1H 20102010
For the 6 months ended 30 Jun
+2.5% pts6.84.3Net margin (%)
+136.8%5.542.34Basic earnings per share(RMB cents)
387.5
19.7
23.4
29.4
108.1
547.3
1H 2009
+1.6% pts21.3Gross margin (%)
+ 134.2%54.8Profit attributable to owners
+ 124.9%66.0Profit before tax
+ 64.4%177.7Gross profit
666.0Bank balances and cash(RMB mn)
(RMB mn)
833.9 + 52.4%Revenue
Change1H 2010
15
Revenue BreakdownRevenue Breakdown
For the 6 months ended 30 Jun
(RMB mn)
833.9
92.8
333.8
407.3
1H 2010
+33.4%250.2254.8Optoelectronic Products
+63.3%249.5268.0Optical Components
+52.4%547.3590.3Total Revenue
+94.9%47.667.5Optical Instruments
Change from 1H 2009
to 1H 20101H 20091H 2008
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Outlook and Strategies
17
Our StrategOur Strategiesies
17
Handsetrelated business
DC related business
Other majorbusiness
Maximizing our exposure to rising demand forhigh-resolution handset lens sets and camera modules (Both – Global Top 5 in 3 years)
Application of our technology and know-how into higher-value-added products, rising production of high-precision lenses of DSLR
Aiming to increase our market sharein security surveillance cameras, vehiclelens sets, infrared lenses and lens setsas well as mid- to high-end optical instrumentsContinue to implement “Lean Production”,
aiming to be the most efficiency lens maker
18
Peer Comparison Peer Comparison
Glass Aspherical
lenses
Glass lenses
Zoom Handset Camera modules
AF Handset Camera modules
Zoom Handset lens sets
AF handset lens sets
Key Technologies or Products
TaiwanLiteon
TaiwanAltus
TaiwanKinko
TaiwanLargan Precision
PRCPhenix Optics
PRCSunny Optical
LocationCompanies
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We are committed to maintaining efficient communication with our investors
IR Contact:Sunny Optical Technology (Group) Company LimitedEmail: [email protected] /
[email protected] /[email protected]
Tel: +86 574 6253 0875 / +852 3568 7038
Media Relations Contact:Porda International (Finance) PR GroupEmail: [email protected]: +852 3150 6788
