Nomura reiterates Buy on Shenzhen Sunway Communication and raises the target price to CNY138

Overview

This is a company research and rating revision report by Nomura on Shenzhen Sunway Communication Co., Ltd. The central view is that the company is benefiting from accelerated deployment of China’s satellite constellations, rising AI hardware content from U.S. customers, and stronger MLCC subsidiary order momentum, with the business mix expected to shift from a margin-pressured consumer electronics revenue base to a higher-value, more diversified mix anchored by satellite communication.

Core views

Nomura views satellite communication as the main driver of a higher-margin revenue mix. The Spacesail/G60 constellation is expected to enter a dense launch phase in June-July 2026, followed by high-frequency launches by the GW constellation, and together with possible second-generation satellite tenders being awarded, this is expected to lift the share of satellite-related revenue. On the consumer electronics side, the first AI hardware device for a U.S. customer is expected to become an incremental growth driver; the company has received new component certification requests, with mass-production supply expected to start at the end of Q3 2026 and possibly align with a Q4 2026 product launch. The report also notes strong revenue growth and order momentum at the MLCC subsidiary, consistent with a premiumization strategy.

Analysis framework

The report analyzes industrial research, satellite constellation launch cadence, customer certification and mass-production timelines, MLCC order momentum, EPS forecast revisions, and relative valuation multiples. Valuation is based on forward P/E for 2028 and references the company’s nine-year historical average P/E and standard deviation range, reflecting potential re-rating from satellite business growth and product mix improvement.

Methodology notes

• Valuation methodologyRelative P/E valuation

  Calculate target price using the 2028 forecast P/E multiple

  The CNY138 target price is based on a 86x forecast P/E for 2028, equivalent to a +3.0 standard deviation level versus the company’s nine-year historical average P/E of 39x; the report argues that 2025-2028 earnings CAGR of roughly 29% and product mix improvement from satellite communication support this valuation premium.

• Earnings forecastEPS forecast uplift

  Increase 2026-2027 per-share earnings forecasts

  Nomura raises 2026-2027 forecast EPS from CNY1.01/CNY1.18 to CNY1.03/CNY1.35 to reflect faster satellite deployment and higher AI equipment content.

• Industry researchValue-chain research

  Track customer certification, mass production, and satellite launch cadence

  The report cites industry research that the company may receive new component certification requests from U.S. customers and will benefit from accelerated satellite constellation deployment by multiple operators in China.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Shenzhen Sunway Communication Co., Ltd. (300136.SS)

  Research target

  Strengths

  Benefits from dense satellite constellation launches in China, rising AI hardware content from U.S. customers, MLCC order growth, and a higher share of high-margin satellite business.

  Weaknesses

  The traditional consumer electronics revenue base faces margin compression, and earnings improvement depends on realization of incremental gains from satellite and AI hardware.

  Comparison

  The report sees the company’s business mix likely shifting from a consumer-electronics-heavy, margin-pressured base to a higher-value, more diversified mix anchored by satellite communication.

  Risks

  Satellite product delivery delays, intensifying competition, policy uncertainty, customer share losses in some areas, and weaker consumer electronics demand.

• MLCC subsidiary

  Important growth and potential stake-increase target

  Strengths

  Strong revenue growth and order momentum, with sample deliveries to new customers, consistent with the premiumization strategy.

  Weaknesses

  The report does not disclose specific revenue scale, margins, or customer conversion rates.

  Comparison

  Compared with traditional component businesses, the MLCC subsidiary is seen as part of the company’s premiumization strategy.

  Risks

  Uncertainty remains around timing of new-customer integration, order durability, and the company’s subsequent stake-increase pace.

Key data

• Report date2026-06-08Date shown on the report cover.
• RatingBuyNomura reiterates Buy.
• Target priceCNY 138.00Raised from CNY87 to CNY138.
• Close priceCNY 103.65Price date is 2026-06-08.
• Implied upside+33.1%Figure disclosed by the report from target price versus close price.
• 2026-2027 forecast EPSCNY1.03/CNY1.35Previously CNY1.01/CNY1.18.
• 2028 forecast EPSCNY1.60Current share price implies a 2028 forecast P/E of around 65x.
• Target price valuation multiple86x 2028F P/EEquivalent to +3.0 standard deviations above the nine-year historical average P/E of 39x.
• Satellite business gross margin35-40%The report argues that a higher share of high-margin satellite business supports valuation premium.
• Market capitalizationUSD 14,779.2mnDisclosed in the key data table.
• 3-month average daily turnoverUSD 1,165.5mnDisclosed in the key data table.

Impact & implications

If constellation deployment and U.S. customer AI hardware mass production progress as expected, the company’s revenue mix may tilt toward higher-margin satellite communication and premium components, leading to upward revisions in earnings forecasts and valuation re-rating. From an investment perspective, the report repositions the company from a cyclical play tied mainly to a consumer electronics chain to one with structural improvement, combining satellite communication, AI hardware content gains, and MLCC growth momentum.

Risks

• Satellite product delivery is slower than expected.
• Competition intensifies or policy uncertainty leads to share losses at some customers.
• Consumer electronics market demand weakens.
• Satellite constellation buildout and launch cadence fall short of expectations.
• The valuation re-rating embedded in the target price fails to materialize.

What to watch

• Actual launch cadence and annual satellites in orbit for Spacesail/G60 in June-July 2026.
• High-frequency launch progress of the GW constellation since July 2026.
• Whether second-generation satellite tenders are awarded and the company’s win or supply share.
• Progress of component certification for U.S. customer AI hardware devices, mass-production supply starting at end of Q3 2026, and Q4 launch cadence.
• Whether MLCC subsidiary sample deliveries to new customers convert to mass production, order durability, and whether the company increases its equity stake in the second half of 2026 through 2027.
• Whether 2026-2028 EPS realization and satellite business gross margin stay within the 35-40% range.