Nomura maintains its Buy rating on Largan Precision, raising the target price to TWD6,000 as CPO FA mass-production progress supports the increase

Overview

This is a Nomura company research report on Largan Precision (3008.TW). The core thesis is that Nomura's confidence in Largan's CPO fiber array (FA) mass production has strengthened further compared with the COMPUTEX period, while visibility for 2027-2028F iPhone camera and lens upgrades has improved. Nomura maintains a Buy rating and raises the target price from TWD4,310 to TWD6,000.

Core views

Nomura believes Largan's CPO FA business is moving from validation toward a stage closer to full mass production: the company has locked in one anchor customer and plans to start pilot production in September 2026, with possible mass production in mid-2027 at the earliest. Largan is expected to rely on its fully automated capabilities to improve mass-production ramp-up, troubleshooting efficiency, and high-precision alignment for FA. On the smartphone side, the report expects the 2026F flagship iPhone to adopt variable aperture, variable aperture to further improve in 2027F, and main-camera resolution to potentially continue rising in 2028F, while periscope lens designs will become more complex in 2027F, and Largan is expected to benefit from its technological edge.

Analysis framework

The report analyzes primarily along revised earnings forecasts, target P/E multiples, historical valuation range, CPO FA production ramp milestones, and the pace of iPhone camera/lens specification upgrades. The valuation base is switched from 2027F to 2028F and applies 25x 2028F EPS of TWD240.0, corresponding to a target price of TWD6,000.

Methodology notes

• equity_valuationP/E multiple valuation

  P/E multiple valuation

  The target price is based on 25x 2028F EPS of TWD240.0; 25x is at the high end of this stock's historical trading range of 10-25x since 2015.

• earnings_revisionforecast_revision

  Earnings forecast revision

  The report cuts 2026/27F earnings forecasts by 2.4% each, mainly reflecting FX volatility and short-term demand impacts from Apple product price increases; it raises the 2028F earnings forecast by 2.3%, reflecting a faster pace of iPhone camera/lens upgrades.

• rating_systemrelative_stock_rating

  Relative rating system

  Nomura's Buy rating indicates that the analyst expects the stock to outperform its benchmark index over the next 12 months.

Asset mapping & comparison

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

• Largan Precision (3008.TW)

  Report core subject and core recommended idea

  Strengths

  One of the global top 2 plastic lens makers, with technological leadership in mobile camera lenses; CPO FA progress is better than expected; automation capability supports mass-production ramp-up and high-precision alignment.

  Weaknesses

  Near-term earnings forecasts were revised down due to temporary effects from FX volatility and Apple end-product price increases on demand.

  Comparison

  Target P/E of 25x is at the high end of the historical trading range of 10-25x since 2015; current trading is at 18x 2027F P/E.

  Risks

  iPhone and Android phone sales below expectations, customer inventory corrections, ASP/margin erosion, slower-than-expected spec upgrades, intensified competition, and lower-than-expected yield.

• Apple

  Key end customer and demand driver

  Strengths

  2026-2028F flagship iPhone camera and lens upgrades may increase demand for premium optical components.

  Weaknesses

  End-product price increases may suppress demand in the short term.

  Comparison

  No peer valuation comparison is provided.

  Risks

  Weaker-than-expected iPhone sales would affect Largan orders and earnings.

• Corning GlassBridge

  Reference for CPO packaging technology path

  Strengths

  The report mentions Corning GlassBridge leans toward the edge-coupling route.

  Weaknesses

  Largan believes the grating coupling FA it focuses on is not affected by that approach.

  Comparison

  Largan believes grating coupling is the mainstream design route.

  Risks

  If the industry technology route shifts away from grating coupling, Largan's CPO FA opportunity may be affected.

Key data

• RatingBuyRating remains unchanged.
• Target priceTWD6,000Previous target price was TWD4,310.
• Current priceTWD3,950Price date is 2026-07-09.
• Implied upside+51.9%Calculated from target price versus current price.
• Valuation assumption25x 2028F EPS TWD240.0Target P/E is at the high end of the historical trading range of 10-25x since 2015.
• 2027F P/E18xThe report states Largan currently trades at 18x 2027F P/E.
• Market capUSD16,077.6mnDisclosed in the report's key data table.
• 3-month ADTUSD285.1mnDisclosed in the report's key data table.
• Free float69.6%Disclosed in the report's key data table.

Impact & implications

If CPO FA enters pilot production as planned and reaches mass production in mid-2027, Largan could expand from a traditional smartphone lens supplier to a key optical component supplier in the CPO chain, and the valuation midpoint may benefit from higher growth. At the same time, if iPhone lens-spec upgrades accelerate in 2027-2028F, this will continue to support Largan's earnings elasticity in high-end smartphone optics.

Risks

• iPhone and Android phone sales are weaker than expected.
• Chinese customer inventory corrections are larger than expected.
• ASP or margin erosion is greater than expected.
• The pace of camera or lens specification upgrades is slower than expected.
• Intensifying competition leads to market-share loss.
• Production yield is worse than expected.
• CPO FA pilot production or mass-production ramp is slower than expected.

What to watch

• Whether pilot production for the single-row FA product starts on schedule in September 2026.
• The production progress and customer onboarding pace for CPO FA, with earliest mass production in mid-2027.
• Customer expansion and PoC progress for Largan in the grating coupling FA route.
• Adoption of variable aperture in flagship iPhones in 2026F.
• The intensity of iPhone main-camera, variable-aperture, and periscope-lens upgrades in 2027-2028F.
• Impacts of FX volatility and Apple product pricing on demand.