shares of sunny optical technology group declined early thursday after the company said it expects a sharp drop in firsthalf profit due to factors including chinas slow economic recovery and weak global demand for smartphones sunny optical shares fell 14 to 6720 hong kong dollars 0128 putting the yuyao chinabased company on track for its biggest oneday loss in more than four years the maker of lenses and lens modules said wednesday after market close that it expects firsthalf profit to drop 6570 from the prioryear period amid a slow economic recovery in china weak demand industrial competition and the prolonged trend of despecification of the smartphone camera the companys firsthalf shipment volumes of handset lens sets and handset camera modules fell amid increasing pressure on selling prices and gross profit margins it said depreciation of the yuan also led to an unrealized foreign exchange loss of 1615 million yuan 223 million sunny optical said citi analysts downgraded their rating on sunny optical to neutral from buy and cut their target price to hk8000 from hk11000 to reflect expectations of prolonged weakness in smartphone demand citi expects global smartphone shipments to drop 8 this year given lackluster consumer confidence in china and overhanging recession concern in the developed markets the bank expects sunny optical to miss its fullyear shipment guidance saying smartphone vendors could hesitate to restock lenses until greater certainty returns to the global economy