Handset lens becomes a seller’s market
​Raise TP to NT$4,800: We fine tune our earnings estimate but raise our TP to NT$4,800 (from NT$4,500) based on a 2017F P/E of 18x vs. 17x previously, as we believe handset lens has become a seller’s market (see our supply chain checks in the second paragraph). Largan dominates this market, and we expect its earnings power in 2H16-2017F to boost its valuation multiple to a higher level. We continue to see robust migration to dual-cam & 6p lens and the gradual ramp-up of auto lens, while the new fab’s contribution will serve as catalysts for both its earnings and share price in the mid- to long term.
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.
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