Largan Precision Earnings: Still the Main Beneficiary of Camera Upgrades in iPhones

Despite sluggish first-quarter results, we kept our fair value estimate for narrow-moat Largan Precision unchanged at TWD 2,600. While we were somewhat disappointed by the extent of the iPhone demand weakness, we believe our 2023 forecasts remain achievable given the adoption of periscope lenses in iPhone 15 Pros and the plausible earlier recovery of Android smartphones (the latter may serve as a catalyst for Sunny Optical’s shares). Over the long term, Largan remains one of the key beneficiaries of smartphone camera upgrades as the structural demand for improving image and video quality is unchanged, as with our fair value estimate.