Sunny Optical Technology reported a 9.9% year-on-year increase in net profit to RMB 1.81 billion for the first half of 2026, as revenue rose 11.5% to RMB 21.9 billion. The Hang Seng-listed company’s shares advanced 5.19% to HKD 65.80 following the earnings update.
Gross margin narrowed to 19.5% from 19.8% in the same period last year, while operating expenses declined 0.2% year-on-year. The expense ratio improved to 11.0% from 12.3%, reflecting tighter cost controls. Net cash flow from operating activities surged 45% year-on-year, and capital expenditures increased 10.6%.
Management highlighted growth across non-handset segments, which now account for 18.4% of revenue compared with 10.9% a year earlier. The Pan-IoT and other products segment expanded by approximately 50% year-on-year, with gross profit share rising to 32.6% from 18.2%. Revenue from vehicle products climbed 10.6%, while XR-related products—including smart and AR glasses—grew more than 50%, contributing over RMB 2 billion in projected annual revenue.
Handset segment revenue declined 0.8% year-on-year amid a 6% to 8% drop in global smartphone shipments during the period. Overseas handset client revenue is expected to more than double in 2026, though full-year smartphone shipments are projected to fall 13.9%.
Sunny Optical maintained its full-year 2026 guidance, reiterating expectations for revenue and net profit growth of at least 7% year-on-year. The company also noted a reduction in exchange losses to RMB 126 million from RMB 1.4 billion in H1 2025, improving financial stability.
Executive Director and Chairman Wang Tan Jiong stated that the company achieved its targets despite a challenging industrial environment, emphasizing the effectiveness of its strategic diversification. CEO Wang Wenjie added that the company’s shift beyond handset optics is entering a harvest period, with non-handset segments contributing meaningfully to both revenue and profitability.
Sunny Optical has paid dividends for 19 consecutive years, with a current yield of 1.93%. The company’s market capitalization stands at $9.01 billion, with a debt-to-equity ratio of 0.26 and a current ratio of 1.64.
