Sunny Optical Technology (Group) Company (2382) investor relations material

Executive summary

• Revenue for H1 2026 rose 11.5% year-over-year to RMB21,905.7 million, driven by growth in vehicle, XR, and Pan-IoT/other products.

• Net profit attributable to shareholders increased 13.1% year-over-year to RMB1,950.0 million, with net margin at 8.9%.

• Handset product revenue declined 0.8% due to lower global smartphone shipments, but offset by higher ASP from high-end products.

• Significant investments and strategic partnerships in AI, AR, and optical technologies reinforced industry leadership.

• No interim dividend declared for H1 2026.

Financial highlights

• Gross profit reached RMB4,268.7 million, up 9.6% year-over-year; gross margin was 19.5%, down 0.3 percentage points.

• Net cash from operating activities was RMB3,426.1 million, up 45% year-over-year.

• Capital expenditure reached RMB1,636.9 million, up 10.6% year-over-year, mainly for property, plant, and equipment.

• Expense ratio decreased from 12.3% to 11%, with total operating expenses down 0.2% year-over-year.

• Basic EPS was RMB168.03 cents, up 10.9% year-over-year.

Outlook and guidance

• Full-year revenue and net profit (excluding share swap) expected to grow by no less than 7% year-over-year.

• Handset business revenue projected to remain flat, with overseas client revenue expected to grow over 100% in 2026.

• XR business revenue expected to exceed RMB2 billion for the full year, with AR glasses poised for explosive growth from 2027.

• Vehicle product business to benefit from autonomous driving, regulatory changes, and rising camera units per vehicle.

• Focus on leveraging AI and optical system integration for new growth in smart devices, automotive, and XR.