Largan Earnings: Outlook Unchanged as Upgrade Demand for Flagship Smartphones Remains Solid

Largan Precision’s first-quarter earnings were on track with our full-year projections, suggesting continued strong demand and camera upgrades for high-end smartphones. Accordingly, we maintain our earnings forecasts for Largan and our fair value estimate of TWD 3,000 per share. We continue to believe that Largan’s shares are undervalued as the company’s margin expansion from improving product mix and production yield is not fully priced in. Larger wins in high-end Chinese smartphones and faster progress in its newly formed lithium-ion battery venture could provide further upside to our fair value estimate.