Nomura maintains Buy on Largan Precision as CPO FA and iPhone lens-upgrade progress accelerates, lifting the target price

Overview

This report is a company research and rating-update note from Nomura on Largan Precision (3008.TW). The key conclusion is to maintain Buy and raise the target price to TWD6,000. The rationale includes a clearer mass-production path for CPO fiber array (FA), more concrete customer rollout progress, and a stronger pace of 2027-28F iPhone camera and lens upgrades.

Core views

Nomura says confidence in CPO FA mass production has improved further since COMPUTEX. The company has locked in one CPO FA customer and plans to start pilot production in September 2026, with earliest mass production in mid-2027. Although 2026/27F earnings were revised slightly lower due to short-term demand pressure from exchange-rate effects and Apple device price increases, 2028F earnings were revised up because iPhone camera/lens upgrades are accelerating. On valuation, Nomura shifted its base to 2028F and increased the target P/E from 20x to 25x.

Analysis framework

The report combines fundamental catalysts with valuation re-rating: on one side it evaluates the timeline and customer progress from PoC to pilot production and mass production for CPO FA; on the other side it assesses how iPhone camera/lens specification upgrades can support Largan's long-term earnings, then derives the target price using 2028F EPS and historical P/E ranges.

Methodology notes

• Valuation methodsP/E multiple valuation

  Estimated a target price of TWD6,000 by applying 25x P/E to 2028F EPS of TWD240.0.

  The 25x target P/E is at the high end of Largan's 2015-to-date historical trading range of 10-25x, reflecting improved visibility on CPO FA mass-production progress and iPhone lens upgrades.

• earnings_revisionforecast revision

  Revised 2026/27F earnings down by 2.4% each and revised 2028F earnings up by 2.3%.

  The near-term downward revision is due to temporary demand impact from currency volatility and Apple device price hikes; the long-term upward revision is due to faster iPhone camera/lens upgrades from the second half of 2027 to 2028F.

Asset mapping & comparison

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

• Largan Precision (3008.TW)

  Primary report subject; leading Taiwan smartphone camera lens vendor, covered by Nomura and maintained at Buy.

  Strengths

  A global top-2 plastic lens manufacturer with technology leadership in smartphone camera lenses; CPO FA automation, high-precision alignment, and mass-production scaling capability are seen as key strengths.

  Weaknesses

  Short-term profitability is affected by currency fluctuations, demand impact from Apple device price hikes, and differences in prioritization among some CPO component solution programs.

  Comparison

  Valuation target P/E is 25x, at the top end of the historical 10-25x range since 2015; current trading is around 18x 2027F P/E.

  Risks

  Lower-than-expected iPhone and Android handset sales, inventory corrections by downstream customers, ASP or margin erosion, slower specification upgrades, share loss from intensified competition, and lower-than-expected manufacturing yields.

• Apple (AAPL US)

  Downstream customer and demand driver linked to iPhone camera/lens upgrades; marked as Not rated in the report.

  Strengths

  Flagship iPhone camera upgrades create potential specification-upgrade opportunities for Largan.

  Weaknesses

  Device price increases may hurt demand in the short term.

  Comparison

  The report does not rate or set a target price for Apple, and treats it only as demand/specification-upgrade context for Largan.

  Risks

  If iPhone sales fall short of expectations or upgrade cadence slows, Largan's earnings and valuation reset could be pressured.

• CPO fiber array (FA)

  New growth opportunity for Largan; the company is focused on grating coupling FA.

  Strengths

  An anchor customer is in place, with pilot production scheduled for September 2026 and earliest mass production in mid-2027; automation helps scaling and troubleshooting.

  Weaknesses

  For other customers, most programs are still in PoC, and mass-production timing and scale remain to be validated.

  Comparison

  Largan views grating coupling as the mainstream design route and believes it is not affected by Corning GlassBridge edge-coupling solutions.

  Risks

  Customer onboarding, mass-production yield, competing solution cost structures, and changes in design architecture could affect commercialization speed.

Key data

• RatingBuyRating unchanged.
• Target priceTWD 6,000Raised from TWD4,310.
• Current priceTWD 3,950.00As of 2026-07-09.
• Implied upside+51.9%Calculated from target and current prices.
• Valuation assumption25x 2028F EPS TWD240.0Target P/E is at the high end of the 2015-to-date historical range.
• Market capitalizationUSD 16,077.6mnAs disclosed in the report.
• 3-month average daily turnoverUSD 285.1mnAs disclosed in the report.
• 2028F free cash flowTWD 27,378mnFrom the cash flow forecast table.
• 2028F year-end cashTWD 141,453mnFrom the cash flow forecast table.

Impact & implications

If Largan's CPO FA pilot and mass-production ramp proceeds as planned and iPhone continues to upgrade variable aperture, periscope, and primary camera resolution in 2027-28F, the company could gain higher growth visibility and valuation premium. Short-term demand pressure and currency fluctuations may still weigh on 2026/27F earnings, but the report places greater emphasis on structural upside in 2028F.

Risks

• iPhone and Android smartphone sales underperforming.
• China customers correcting inventories more than expected.
• ASP or margin compression worse than expected.
• Slower-than-expected camera/lens specification upgrades.
• Market share loss from intensified competition.
• Manufacturing yields below expectations.
• Customer validation and scale-up from CPO FA pilot to mass production slower than expected.

What to watch

• Whether pilot production of the one-row FA product starts as scheduled in September 2026.
• Whether CPO FA can reach mass production as early as mid-2027 and the size of the first customer order.
• The pace at which other customers move from PoC to formal adoption.
• Progress of 2026F flagship iPhone variable aperture adoption, and 2027F enhanced VA, periscope, and 2028F primary camera resolution upgrades.
• The ongoing demand impact of Apple device price increases.
• Largan's ASP, gross margin, yield, and inventory correction trends.