Sunny Optical (2382 HK): Updated Figures On The Auto Ops Spin-Off

• Back on the 5th January, Sunny Optical Technology (2382 HK), a leading player in the global optical space, announced an intention to spin-off and separate list its vehicle-related optical ops.

• The spin-off vehicle, Ningbo Sunny Smart Autotech, is the world leader in car camera lenses used for parking and autonomous driving.

• The listing form (Form A1) has now been submitted to the HKEx. Ningbo Sunny’s net margins have been consistently solid.

The Trade:

• The (continued) muted market response to Ningbo Sunny’s spin-off is indicative.

• Metrics for Sunny Optical are not inexpensive.

• Ningbo Sunny’s net margins are robust.

• Expect a punchy holdco discount to be assigned to Sunny Optical, post spin-off.

• Sunny Optical shorts have touched an all-time high - 13.2%.

The insight is still labelled bullish as I’m still not bearish here.