Margin uplift and favorable industry trends lead to more upside
​Raise TP to NT$4,000: We raise our 2016/17F EPS forecasts by 3%/8% respectively given a better ASP & margin outlook and raise our TP from NT$3,700 to NT$4,000, still based on 16x 2017F P/E. While the share price has outperformed the TAIEX by 34% YTD, we believe robust migration to dual-cam/6p and the contribution from the new fab in 1H17 will serve as catalysts to both earnings and the share price in the mid- to long term. We also believe Largan is far ahead of Kantatsu in iPhone 7/7+ lens ramp up, providing further earnings upside in 2H16.
Largan Precision is engaged in the design, research, development, manufacture and sale of optical lens, camera projector, field glasses, microscope, scanner, viewfinders, camera lens module, mobile phone lens, object lens, mouse lens, digital camera and related spare parts; and the provision of after sales services.
Yuanta is a Taiwan-headquartered brokerage with a growing presence in Asia, especially across Greater China. Our team of 140+ provides cutting-edge analysis on key sectors, spread across offices in Taiwan, Hong Kong, Shanghai (A-Share), Seoul and Jakarta. With an ever-expanding coverage universe of 400+ companies, we provide in depth analysis with unique local color to investors. Consistently being voted the Best Investment Consulting Firm in Taiwan in the AsiaMoney broker poll is evidence of our strength. We target providing an extensive range of research, from small, to mid-sized, to large cap. We bring you the big, well-covered names, as well as going off the beaten track to research the less-familiar companies.
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