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原始內容
Largan (3008.TW)
FAU to drive strong earnings growth and re-rating; TP up to NT$11,000, Buy
3008.TW 12m Price Target: NT$11,000.00 Price: NT$6,660.00 Upside: 65.2%
We are positive on Largan and expect its strong alignment technology to continue supporting its expansion from handset lens into FA and FAU for CPO switches. The company's FA has passed customer qualification with strong positive feedback, while customers prefer to purchase its integrated product (FA+FAU), reaffirming our positive view on Largan's business expansion. Management highlights that its strong alignment and automated production provide strong precision, fast production and testing, supporting customer penetration. We model FAU revenue contribution at 3% in 2027E and above 50% in 2030E, driving Largan's earnings growth, margin expansion, and valuation re-rating. Maintain Buy with TP up to NT$11,000 (implies 39.8x 2028E PE).
Exhibit 1: Largan revenues by products and GM trend
Source: Company data, Goldman Sachs Global Investment Research
3-month revenue preview: Largan delivered weak revenue growth in 3Q26 with revenue -11% YoY, which we attribute to a slow smartphone market amid high memory costs, fewer model launches of its major smartphone brand customer, and foldable phones released in 4Q26 (report link). The miss also reflects a slower handset lens pixel mix upgrade than we had previously estimated.
BUY
Verena Jeng +852-2978-1681 | verena.jeng@gs.com Goldman Sachs (Asia) L.L.C.
Allen Chang
+852-2978-2930 | allen.k.chang@gs.com Goldman Sachs (Asia) L.L.C.
Key Data _____________________________________
Market cap: NT$896.1bn / $28.1bn
Enterprise value: NT$782.7bn / $24.5bn
3m ADTV: NT$13.2bn / $413.8mn
Taiwan
Greater China Technology
M&A Rank: 3
Leases incl. in net debt & EV?: No
| GS Forecast | 12/25 | __________ 12/26E | 12/27E | 12/28E |
|---|---|---|---|---|
| Revenue (NT$ mn) New | 61,147.9 | 61,653.5 | 76,334.7 | 101,306.6 |
| Revenue (NT$ mn) Old | 61,147.9 | 65,503.4 | 76,561.8 | 85,020.5 |
| EBITDA (NT$ mn) | 31,290.3 | 30,251.2 | 42,329.3 | 53,616.0 |
| EPS (NT$) New | 159.41 | 162.60 | 207.41 | 278.57 |
| EPS (NT$) Old | 159.41 | 187.34 | 217.11 | 239.29 |
| P/E (X) | 14.8 | 41.0 | 32.1 | 23.9 |
| P/B (X) | 1.7 | 4.5 | 4.2 | 3.9 |
| Dividend yield (%) | 3.3 | 1.2 | 1.5 | 2.1 |
| CROCI (%) | 11.2 | 11.5 | 14.4 | 16.2 |
| 9/26 | 12/26E | 3/27E | 6/27E | |
| EPS (NT$) | 39.62 | 40.65 | 49.77 | 36.05 |
Source: Company data, Goldman Sachs Research estimates. See disclosures for details.
Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to
www.gs.com/research/hedge.html. Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.
e92c7a75ab8b4efbba794e6b187208c8
BUY
Largan (3008.TW)
Rating since Nov 12, 2024
Ratios & Valuation __________________________________________
| 12/25 | 12/26E | 12/27E | 12/28E | |
|---|---|---|---|---|
| P/E (X) | 14.8 | 41.0 | 32.1 | 23.9 |
| P/B (X) | 1.7 | 4.5 | 4.2 | 3.9 |
| FCF yield (%) | 4.3 | 1.1 | 3.7 | 3.3 |
| EV/EBITDAR (X) | 6.4 | 25.6 | 17.8 | 13.8 |
| EV/EBITDA (excl. leases) (X) | 6.4 | 25.6 | 17.8 | 13.8 |
| CROCI (%) | 11.2 | 11.5 | 14.4 | 16.2 |
| ROE (%) | 11.4 | 11.1 | 13.4 | 16.7 |
| Net debt/equity (%) | (64.1) | (60.3) | (66.6) | (68.0) |
| Net debt/equity (excl. leases) (%) | (64.1) | (60.3) | (66.6) | (68.0) |
| Interest cover (X) | 15,611.8 | 7,608.9 | 9,940.7 | 13,702.5 |
| Days inventory outst, sales | 37.1 | 47.9 | 40.9 | 40.4 |
| Receivable days | 62.1 | 62.0 | 50.0 | 50.0 |
| Days payable outstanding | 21.6 | 22.0 | 22.0 | 22.0 |
| DuPont ROE (%) | 11.1 | 10.7 | 12.9 | 15.9 |
| Turnover (X) | 0.3 | 0.3 | 0.3 | 0.4 |
| Leverage (X) | 1.2 | 1.2 | 1.2 | 1.2 |
| Gross cash invested (ex cash) (NT$) | 222,420.9 | 241,679.6 | 267,828.7 | 298,740.5 |
| Average capital employed (NT$) | 73,429.5 | 80,655.1 | 82,379.7 | 79,780.5 |
| BVPS (NT$) | 1,395.59 | 1,484.98 | 1,579.62 | 1,727.59 |
Growth & Margins (%) ______________________________________
| 12/25 | 12/26E | 12/27E | 12/28E | |
|---|---|---|---|---|
| Total revenue growth | 2.8 | 0.8 | 23.8 | 32.7 |
| EBITDA growth | 3.4 | (3.3) | 39.9 | 26.7 |
| EPS growth | (19.7) | 2.0 | 27.6 | 34.3 |
| DPS growth | (19.0) | 2.4 | 27.0 | 35.0 |
| EBIT margin | 38.5 | 35.2 | 39.2 | 40.7 |
| EBITDA margin | 51.2 | 49.1 | 55.5 | 52.9 |
| Net income margin | 34.8 | 35.1 | 36.3 | 36.7 |
Price Performance __________________________________________
| 3m | 6m | 12m | |
|---|---|---|---|
| Absolute | 68.6% | 192.1% | 168.0% |
| Rel. to the Taiwan SE Weighted Index | 56.4% | 105.9% | 47.1% |
Source: FactSet. Price as of 8 Oct 2026 close.
Income Statement (NT$ mn) ________________________________
| 12/25 | 12/26E | 12/27E | 12/28E | |
|---|---|---|---|---|
| Total revenue | 61,147.9 | 61,653.5 | 76,334.7 | 101,306.6 |
| Cost of goods sold | (30,310.8) | (32,786.7) | (38,112.7) | (49,958.8) |
| SG&A | (1,985.5) | (1,885.5) | (1,832.0) | (1,620.9) |
| R&D | (5,293.3) | (5,295.8) | (6,488.4) | (8,509.8) |
| Other operating inc./(exp.) EBITDA | -- 31,290.3 | -- 30,251.2 | -- 42,329.3 | -- 53,616.0 |
| Depreciation & amortization | (7,732.0) | (8,565.7) | (12,427.8) | (12,398.9) |
| EBIT | 23,558.3 | 21,685.5 | 29,901.5 3,913.0 | 41,217.1 4,104.2 |
| Net interest inc./(exp.) Income/(loss) from associates | 4,258.6 87.0 | 3,896.3 83.3 | -- | -- |
| Pre-tax profit | 25,900.2 | 26,446.2 | 33,814.6 | 45,321.3 |
| Provision for taxes | (4,340.0) | (4,539.3) | (5,883.7) | (7,891.5) |
| Minority interest Preferred dividends | (284.9) | (241.0) | (248.7) -- | (250.2) -- |
| -- | -- | |||
| Net inc. (pre-exceptionals) | 21,275.4 | 21,665.9 | 27,682.2 | 37,179.6 |
| Post-tax exceptionals Net inc. (post-exceptionals) EPS (basic, pre-except) (NT$) | -- 21,275.4 159.41 | -- 21,665.9 162.60 161.03 | -- 27,682.2 207.41 204.55 | -- 37,179.6 |
| EPS (basic, post-except) EPS (diluted, post-except) (NT$) DPS (NT$) | 157.21 | ______ 161.03 79.76 49.1 | 204.55 101.32 48.9 | 278.57 276.22 |
| EPS (diluted, pre-except) (NT$) (NT$) | 162.60 | 278.57 276.22 | ||
| 159.41 | 207.41 | |||
| 157.21 | ||||
| 77.87 | 136.83 49.1 | |||
| Div. payout ratio (%) | ||||
| Balance Sheet (NT$ | 48.9 | |||
| mn) Cash & cash equivalents | 12/25 115,941.7 | 12/26E 115,177.0 | 12/27E 136,906.6 10,430.0 | 12/28E 152,609.6 17,325.2 |
| Accounts receivable Inventory | 10,461.7 6,713.2 | 10,483.6 9,455.6 | 7,669.0 | 14,778.3 |
| Other current | 21,168.8 | 21,168.8 | 21,168.8 | 21,168.8 |
| assets Total current assets | 154,285.5 | 156,285.0 | 176,174.5 | 205,881.9 |
| Net PP&E | 51,472.4 | 60,978.8 | 57,943.2 | |
| Net intangibles | 474.6 | 351.6 | 344.5 | 52,866.6 213.7 |
| Total investments | 26.5 | 26.5 | 26.5 14,528.1 | 26.5 |
| Other long-term assets Total assets | 14,528.1 220,787.0 | 14,528.1 232,169.9 | 249,016.8 | 14,528.1 273,516.7 |
| 1,727.9 | 2,224.5 | 2,369.9 | 3,652.5 | |
| Accounts payable Short-term debt | ||||
| 0.0 | 0.0 | 0.0 -- | 0.0 -- | |
| Short-term lease liabilities | -- 28,020.6 | -- 28,214.1 | 31,194.1 | 35,898.7 39,551.2 |
| Other current liabilities Total current liabilities | 29,748.5 | 30,438.5 | 33,564.1 | |
| Long-term debt | -- | -- | -- -- | -- |
| Long-term lease liabilities | -- 170.6 | -- 170.6 | -- 170.6 | |
| Other long-term liabilities | 170.6 | |||
| Total long-term Total liabilities Preferred shares | 29,919.1 -- | 30,609.1 -- | -- | 170.6 39,721.7 |
| liabilities | 170.6 | 170.6 | 170.6 33,734.6 | -- |
| Total common equity | 188,867.2 2,000.8 | 199,801.1 1,759.8 | 213,771.1 1,511.1 | 232,534.0 1,261.0 |
| Minority interest | 273,516.7 | |||
| Total liabilities & | 220,787.0 (122,308.6) | (121,543.8) | (143,273.5) | |
| equity | 232,169.9 | 249,016.8 | ||
| Net debt, adjusted | (158,976.5) | |||
| __________ | ||||
| Cash Flow (NT$ mn) Net income D&A add-back | 12/25 25,900.2 7,732.0 (284.9) | 12/26E 21,665.9 8,565.7 (241.0) (2,267.7) | 12/27E 27,682.2 12,427.8 (248.7) | 12/28E 37,179.6 12,398.9 (250.2) (12,721.8) |
| Minority interest add-back Net (inc)/dec working capital Other operating cash flow | (1,208.2) (6,058.9) 26,080.2 | -- | 1,985.6 | -- |
| Cash flow from | 27,723.0 | -- | ||
| operations | 41,846.9 | 36,606.6 | ||
| Capital expenditures | (12,340.0) | (17,849.1) | (9,160.2) -- | (7,091.5) -- |
| Acquisitions Divestitures | (2,040.4) (2.6) | -- | (225.0) -- | (100.0) -- |
| Others | 5,147.2 | (100.0) -- | ||
| Cash flow from investing | (9,235.7) | (17,949.1) | (9,385.2) | (7,191.5) |
| Repayment of lease liabilities pref) | -- (13,013.1) | -- | -- (10,732.1) | -- (13,712.2) |
| Dividends paid (common & Inc/(dec) in debt | (203.4) | (10,538.6) | -- | -- |
| Other financing cash | (1,344.6) | -- 0.0 | 0.0 | 0.0 |
| flows Cash flow from financing | (14,561.2) 2,283.4 | (10,538.6) (764.7) | (10,732.1) | 15,703.0 |
| Total cash flow | 21,729.7 | (13,712.2) | ||
| Free cash flow | 13,740.3 | 9,873.9 | 32,686.7 | 29,515.1 |
Source: Company data, Goldman Sachs Research estimates.
e92c7a75ab8b4efbba794e6b187208c8
We expect Oct revenues to be at a similar level to Sep, and to sequentially decline in Nov and Dec, resulting in 4Q26 revenue growth of +7% QoQ.
Exhibit 2: Largan monthly revenues preview
| Jul 2026 | Aug 2026 | Sep 2026 | Oct 2026E | Nov 2026E | Dec 2026E | 2Q26 | 3Q26 | 4Q26E | |
|---|---|---|---|---|---|---|---|---|---|
| Rev (NT$m) | 4,877 | 5,012 | 5,779 | 5,895 | 5,600 | 5,299 | 13,665 | 15,651 | 16,794 |
| YoY | -11% | -16% | -7% | -6% | 6% | -6% | 17% | -11% | -2% |
| MoM/QoQ | 31% | 3% | 15% | 2% | -5% | -5% | -12% | 15% | 7% |
| GS estimates (NT$m) | 4,826 | 6,756 | 7,285 | 13,750 | 18,866 | ||||
| Act. Vs. GS | 1% | -26% | -21% | -1% | -17% |
Source: Company data, Goldman Sachs Global Investment Research
Earnings revision
Our net income estimates are revised by -13% / -4% / +16% in 2026-28E mainly on changes in revenues, GM, and Opex ratio, reflecting: (1) handset lens: we continue to expect Largan's lens pixel mix upgrade, but at a slower pace, reflecting the 3Q26 miss and slow smartphone market amid high memory costs, (2) FAU: we estimate revenue contribution will begin in 2H27, with 0.6m / 5m in 2027 / 28E, along with product mix upgrade toward higher bandwidth FAU that should support ASP and GM. We expect FAU revenue contribution of 3% in 2027E and exceed 50% in 2030E, (3) GM: we lower our GM estimates to reflect the slower pace of handset lens pixel mix upgrade and the company's higher costs on green energy. We expect GM to sustain at ~50% in 2026-28E, supported by continuous handset lens pixel mix upgrade and strong demand of FAU, (4) Opex ratio: we continue to expect rising opex, while the opex ratio would improve as strong revenue growth driven by FAU and FAU's higher ASP relative to handset lens enhance operating efficiency.
Exhibit 3: Largan earnings revision
| NT m | 2026E - Old | 2026E - New | 2026E - Chg | 2027E - Old | 2027E - New | 2027E - Chg | 2028E - Old | 2028E - New | 2028E - Chg |
|---|---|---|---|---|---|---|---|---|---|
| Revenue | 65,503 | 61,654 | -6% | 76,562 | 76,335 | 0% | 85,021 | 101,307 | 19% |
| GP | 33,681 | 28,867 | -14% | 42,012 | 38,222 | -9% | 47,968 | 51,348 | 7% |
| OP | 25,995 | 21,685 | -17% | 32,893 | 29,902 | -9% | 37,757 | 41,217 | 9% |
| Net income | 24,904 | 21,666 | -13% | 28,976 | 27,682 | -4% | 31,937 | 37,180 | 16% |
| EPS (Diluted) | 185.12 | 161.03 | -13% | 214.48 | 204.55 | -5% | 237.27 | 276.22 | 16% |
| Margins | |||||||||
| GM | 51.4% | 46.8% | 54.9% | 50.1% | 56.4% | 50.7% | |||
| OPM | 39.7% | 35.2% | 43.0% | 39.2% | 44.4% | 40.7% | |||
| NM | 38.0% | 35.1% | 37.8% | 36.3% | 37.6% | 36.7% |
Source: Goldman Sachs Global Investment Research
e92c7a75ab8b4efbba794e6b187208c8
Exhibit 4: Largan revenues and GM revision
| Revenues (NT$m) | 2026E | 2027E | 2028E | GM | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|
| NEW | 61,654 | 76,335 | 101,307 | NEW | 46.8% | 50.1% | 50.7% |
| FAU | - | 2,074 | 19,191 | FAU | 46.0% | 47.4% | |
| Periscope lens | 19,653 | 23,178 | 26,702 | Periscope lens | 38.4% | 38.3% | 38.2% |
| 20MPx+ handset lens | 11,911 | 26,562 | 34,714 | 20MPx+ handset lens | 70.5% | 70.4% | 70.4% |
| Other handset lens | 17,833 | 13,078 | 9,657 | Other handset lens | 57.1% | 56.4% | 55.6% |
| Others | 12,256 | 11,443 | 11,042 | Others | 22.5% | 20.3% | 20.3% |
| OLD | 65,503 | 76,562 | 85,021 | OLD | 51.4% | 54.9% | 56.4% |
| FAU | 63 | 1,067 | 4,518 | FAU | 50.3% | 50.4% | 50.5% |
| Periscope lens | 18,610 | 18,570 | 20,741 | Periscope lens | 38.9% | 38.5% | 38.5% |
| 20MPx+ handset lens | 16,705 | 31,766 | 38,447 | 20MPx+ handset lens | 72.9% | 73.0% | 75.0% |
| Other handset lens | 17,796 | 13,029 | 9,611 | Other handset lens | 62.7% | 62.3% | 62.0% |
| Others | 12,330 | 12,130 | 11,705 | Others | 24.8% | 24.8% | 24.9% |
| CHG | -6% | 0% | 19% | CHG (NEW - OLD) | -5% | -5% | -6% |
| FAU | -100% | 94% | 325% | FAU | -50% | -4% | -3% |
| Periscope lens | 6% | 25% | 29% | Periscope lens | -1% | 0% | 0% |
| 20MPx+ handset lens | -29% | -16% | -10% | 20MPx+ handset lens | -2% | -3% | -5% |
| Other handset lens | 0% | 0% | 0% | Other handset lens | -6% | -6% | -6% |
| Others | -1% | -6% | -6% | Others | -2% | -5% | -5% |
Source: Company data, Goldman Sachs Global Investment Research
Exhibit 5: Largan 3Q26 results snapshot
| NT m | 3Q25 | 2Q26 | 3Q26 | QoQ | YoY | GS | Act / GS | Cons. | Act/Cons. |
|---|---|---|---|---|---|---|---|---|---|
| Revenue | 17,677 | 13,665 | 15,651 | 15% | -11% | 18,866 | -17% | 18,196 | -14% |
| GP | 8,352 | 6,753 | 6,607 | -2% | -21% | 9,339 | -29% | 9,120 | -28% |
| OP | 6,265 | 5,148 | 4,735 | -8% | -24% | 7,094 | -33% | 6,946 | -32% |
| Net income | 7,080 | 4,670 | 5,182 | 11% | -27% | 6,699 | -23% | 6,723 | -23% |
| Margins | |||||||||
| GM | 47.2% | 49.4% | 42.2% | 49.5% | 50.1% | ||||
| OPM | 35.4% | 37.7% | 30.3% | 37.6% | 38.2% | ||||
| NM | 40.1% | 34.2% | 33.1% | 35.5% | 36.9% |
Source: Company data, Goldman Sachs Global Investment Research, Bloomberg
Compared to Bloomberg consensus, we are 4% / 16% ahead in 2027 / 28E net income, mainly on higher revenues and lower opex ratio, reflecting our positive view on Largan's FAU, which is in strong demand with bandwidth upgrade.
Exhibit 6: GS vs. Bloomberg consensus
| NT m | 2027E - GS | 2027E - BB | 2027E - Diff % | 2028E - GS | 2028E - BB | 2028E - Diff % |
|---|---|---|---|---|---|---|
| Revenue | 76,335 | 72,074 | 6% | 101,307 | 90,479 | 12% |
| GP | 38,222 | 36,929 | 4% | 51,348 | 45,410 | 13% |
| OP | 29,902 | 28,454 | 5% | 41,217 | 34,680 | 19% |
| Net income | 27,682 | 26,732 | 4% | 37,180 | 31,942 | 16% |
| Margins | ||||||
| GM | 50.1% | 51.2% | 50.7% | 50.2% | ||
| OPM | 39.2% | 39.5% | 40.7% | 38.3% | ||
| NM | 36.3% | 37.1% | 36.7% | 35.3% |
Source: Goldman Sachs Global Investment Research, Bloomberg
We change our valuation methodology from 2027E PE to discounted PE to better capture the company's long term opportunities in FAU. Our target PE multiple (29.8x) is derived from (1) peers' avg. ratio of trading PE to forward year fundamentals (NI YoY and OPM), which is at 0.5x, and (2) Largan's forward year fundamentals: 2030-31E NI YoY at
Valuation
e92c7a75ab8b4efbba794e6b187208c8
19% on avg. and OPM at 41% on avg. We apply the target PE multiple to Largan's 2030E EPS and discount it back to 2027E via a COE of 10.7%, which is based on beta at 1.1x, risk free at 3.5%, and market risk premium at 6.5%. Our new target price is NT$11,000 (vs. NT$6,263 previously). Our target price implies 39.8x 2028E PE, the first full year of FAU contribution, which is within Largan's historical trading range of 8.0x to 45.1x, reflecting our positive view on Largan's expansion from handset lens to FAU, which broadens its exposure from consumer electronics to AI data center that enjoys strong market growth, and could support a valuation re-rating. We note that Taiwan AI supply chain also enjoys re-rating when expanding from consumer electronics to AI data center. Maintain Buy.
Exhibit 7: Largan discounted PE
| NT$m | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E | 2029E | 2030E | 2031E |
|---|---|---|---|---|---|---|---|---|---|
| Key assumptions | |||||||||
| Revenues (NT$m) | 48,842 | 59,458 | 61,148 | 61,654 | 76,335 | 101,307 | 150,128 | 191,476 | 214,294 |
| FAU | - | - | - | - | 2,074 | 19,191 | 63,908 | 103,530 | 126,348 |
| Others | 48,842 | 59,458 | 61,148 | 61,654 | 74,261 | 82,115 | 86,221 | 87,945 | 87,945 |
| YoY | 2% | 22% | 3% | 1% | 24% | 33% | 48% | 28% | 12% |
| FAU | 825% | 233% | 62% | 22% | |||||
| Others | 2% | 22% | 3% | 1% | 20% | 11% | 5% | 2% | 0% |
| FAU revenues contribution | 3% | 19% | 43% | 54% | 59% | ||||
| FAU shipment (k units) | 592 | 4,789 | 14,368 | 21,551 | 25,862 | ||||
| YoY | 710% | 200% | 50% | 20% | |||||
| FAU ASP (US$) | 117 | 134 | 148 | 160 | 163 | ||||
| YoY | 14% | 11% | 8% | 2% | |||||
| P&L | |||||||||
| Revenue | 48,842 | 59,458 | 61,148 | 61,654 | 76,335 | 101,307 | 150,128 | 191,476 | 214,294 |
| Gross profit | 23,808 | 31,209 | 30,837 | 28,867 | 38,222 | 51,348 | 76,093 | 97,050 | 108,616 |
| Gross margin | 48.7% | 52.5% | 50.4% | 46.8% | 50.1% | 50.7% | 50.7% | 50.7% | 50.7% |
| OPEX | 5,986 | 7,177 | 7,279 | 7,181 | 8,320 | 10,131 | 15,013 | 19,148 | 21,429 |
| Opex ratio | 12.3% | 12.1% | 11.9% | 11.6% | 10.9% | 10.0% | 10.0% | 10.0% | 10.0% |
| Operating profit | 17,821 | 24,033 | 23,558 | 21,685 | 29,902 | 41,217 | 61,081 | 77,903 | 87,186 |
| OPM | 36.5% | 40.4% | 38.5% | 35.2% | 39.2% | 40.7% | 40.7% | 40.7% | 40.7% |
| Non-op | 4,280 | 8,142 | 2,342 | 4,761 | 3,913 | 4,104 | 4,104 | 4,104 | 4,104 |
| Pre-tax profit | 22,102 | 32,174 | 25,900 | 26,446 | 33,815 | 45,321 | 65,185 | 82,007 | 91,291 |
| Tax | 4,200 | 5,963 | 4,340 | 4,539 | 5,884 | 7,891 | 11,350 | 14,279 | 15,896 |
| Tax rate | 19.0% | 18.5% | 16.8% | 17.2% | 17.4% | 17.4% | 17.4% | 17.4% | 17.4% |
| Minority | - | 296 | 285 | 241 | 249 | 250 | 250 | 250 | 250 |
| Net profit | 17,902 | 25,915 | 21,275 | 21,666 | 27,682 | 37,180 | 53,584 | 67,478 | 75,145 |
| EPS (NTD, diluted) | 132.62 | 191.44 | 157.21 | 161.03 | 204.55 | 276.22 | 398.10 | 501.32 | 558.28 |
| YoY | -21% | 44% | -18% | 2% | 27% | 35% | 44% | 26% | 11% |
| TP implied P/E | 53.8 | 39.8 | 27.6 | 21.9 | 19.7 |
| 2030E target P/E | 29.8 |
|---|---|
| Target multiple x EPS | 14,939 |
| Discounted back to 2027; TP (NTD) | 11,000 |
| Implied 2027 P/E | 53.8 |
| COE assumption | |
|---|---|
| Beta | 1.1 |
| Risk free | 3.5% |
| Market risk premium | 6.5% |
| COE | 10.7% |
Source: Company data, Goldman Sachs Global Investment Research, Bloomberg
e92c7a75ab8b4efbba794e6b187208c8
Exhibit 8: Largan peer comparison
| Company | Ticker | Rating | PE - 2030E | NI YoY - 2030E | NI YoY - 2031E | OPM - 2030E | OPM - 2031E | Ratio |
|---|---|---|---|---|---|---|---|---|
| Largan | 3008.TW | Buy | 13.3 | 26% | 11% | 40.7% | 40.7% | 0.2 |
| Largan (TP implied) | 3008.TW | Buy | 29.8 | 26% | 11% | 40.7% | 40.7% | 0.5 |
| Company | Ticker | Rating | PE | NI YoY | NI YoY | OPM | OPM | Ratio |
| 2027E | 2027E | 2028E | 2027E | 2028E | ||||
| Peers | ||||||||
| AAC | 2018.HK | Neutral | 12.4 | 17% | 12% | 9.7% | 10.0% | 0.5 |
| T&S | 300570.SZ | NC | 47.1 | 96% | 62% | 24.2% | 25.4% | 0.5 |
| VPEC | 2455.TW | Buy | 48.9 | 67% | 55% | 35.2% | 37.3% | 0.5 |
| Sumitomo | 5802.JT | Buy | 17.2 | 18% | 25% | 9.8% | 11.2% | 0.5 |
| Average | 31.4 | 50% | 38% | 19.7% | 21.0% | 0.5 |
NC: Not Covered; data from Bloomberg consensus. Price as of Oct 9, 2026.
Source: Goldman Sachs Global Investment Research, Bloomberg
Exhibit 9: Taiwan AI server supply chain enjoys strong re-rating when expanding from consumer electronics to AI data center
| Company | Ticker | 2020-2025 PE - Trough | 2020-2025 PE - Peak | 2020-2025 PE - Diff |
|---|---|---|---|---|
| Largan | 3008.TW | 10.6 | 28.0 | 163% |
| Taiwan AI server supply chain | Taiwan AI server supply chain | Taiwan AI server supply chain | Taiwan AI server supply chain | Taiwan AI server supply chain |
| Landmark | 3081.TWO | 28.9 | 144.1 | 398% |
| VPEC | 2455.TW | 18.1 | 74.1 | 310% |
| Auras | 3324.TWO | 8.8 | 54.6 | 523% |
| Fositek | 6805.TW | 11.3 | 49.9 | 343% |
| AVC | 3017.TW | 4.7 | 32.8 | 604% |
| Inventec | 2356.TW | 9.9 | 31.0 | 213% |
| King Slide | 2059.TW | 9.0 | 30.2 | 236% |
| Gigabyte | 2376.TW | 3.8 | 29.6 | 685% |
| Mitac | 3706.TW | 2.5 | 28.7 | 1044% |
| Chenbro | 8210.TW | 6.7 | 25.6 | 282% |
| Wiwynn | 6669.TW | 6.1 | 23.4 | 287% |
| Wistron | 3231.TW | 6.0 | 21.8 | 262% |
| Quanta | 2382.TW | 6.8 | 20.4 | 201% |
| Hon Hai | 2317.TW | 7.7 | 17.5 | 129% |
| Avg. | 9.3 | 41.7 | 394% |
Source: Company data, Goldman Sachs Global Investment Research, Bloomberg
Exhibit 10: Largan 12M forward PE ratio
Source: Company data, Goldman Sachs Global Investment Research, Bloomberg
Exhibit 11: Largan QFII holdings
Source: TEJ
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Financial tables
Exhibit 12: Largan P&L
| NT$m | 1Q26 | 2Q26 | 3Q26 | 4Q26E | 1Q27E | 2Q27E | 3Q27E | 4Q27E | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | 15,544 | 13,665 | 15,651 | 16,794 | 18,095 | 13,322 | 19,655 | 25,263 | 48,842 | 59,458 | 61,148 | 61,654 | 76,335 | 101,307 |
| GP | 7,680 | 6,753 | 6,607 | 7,827 | 9,110 | 6,375 | 9,995 | 12,743 | 23,808 | 31,209 | 30,837 | 28,867 | 38,222 | 51,348 |
| OP income | 5,812 | 5,148 | 4,735 | 5,990 | 7,137 | 4,923 | 7,852 | 9,989 | 17,821 | 24,033 | 23,558 | 21,685 | 29,902 | 41,217 |
| Net income | 6,123 | 4,670 | 5,182 | 5,690 | 6,643 | 4,812 | 7,230 | 8,996 | 17,902 | 25,915 | 21,275 | 21,666 | 27,682 | 37,180 |
| EPS, diluted (NT$) | 46.11 | 35.61 | 39.52 | 39.79 | 49.09 | 35.56 | 53.43 | 66.48 | 132.62 | 191.44 | 157.21 | 161.03 | 204.55 | 276.22 |
| YoY | ||||||||||||||
| Revenues | 7% | 17% | -11% | -2% | 16% | -3% | 26% | 50% | 2% | 22% | 3% | 1% | 24% | 33% |
| GP | -4% | 8% | -21% | -5% | 19% | -6% | 51% | 63% | -9% | 31% | -1% | -6% | 32% | 34% |
| OP income | -5% | 6% | -24% | -5% | 23% | -4% | 66% | 67% | -13% | 35% | -2% | -8% | 38% | 38% |
| Net income | -5% | 352% | -27% | -15% | 8% | 3% | 40% | 58% | -21% | 45% | -18% | 2% | 28% | 34% |
| EPS, diluted (NT$) | -3% | 362% | -25% | -19% | 6% | 0% | 35% | 67% | -21% | 44% | -18% | 2% | 27% | 35% |
| QoQ | ||||||||||||||
| Revenues | -10% | -12% | 15% | 7% | 8% | -26% | 48% | 29% | ||||||
| GP | -7% | -12% | -2% | 18% | 16% | -30% | 57% | 27% | ||||||
| OP income | -8% | -11% | -8% | 27% | 19% | -31% | 60% | 27% | ||||||
| Net income | -9% | -24% | 11% | 10% | 17% | -28% | 50% | 24% | ||||||
| EPS, diluted (NT$) | -6% | -23% | 11% | 1% | 23% | -28% | 50% | 24% | ||||||
| Margins | ||||||||||||||
| GM | 49.4% | 49.4% | 42.2% | 46.6% | 50.3% | 47.9% | 50.9% | 50.4% | 48.7% | 52.5% | 50.4% | 46.8% | 50.1% | 50.7% |
| OPM | 37.4% | 37.7% | 30.3% | 35.7% | 39.4% | 37.0% | 40.0% | 39.5% | 36.5% | 40.4% | 38.5% | 35.2% | 39.2% | 40.7% |
| NM | 39.4% | 34.2% | 33.1% | 33.9% | 36.7% | 36.1% | 36.8% | 35.6% | 36.7% | 43.6% | 34.8% | 35.1% | 36.3% | 36.7% |
| Ratios | ||||||||||||||
| Opex ratio | 12% | 12% | 12% | 11% | 11% | 11% | 11% | 11% | 12% | 12% | 12% | 12% | 11% | 10% |
| Tax rate | 15% | 23% | 14% | 17% | 17% | 17% | 17% | 17% | 19% | 19% | 17% | 17% | 17% | 17% |
Source: Company data, Goldman Sachs Global Investment Research
e92c7a75ab8b4efbba794e6b187208c8
Exhibit 13: Largan balance sheet
| NT$ mn | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|
| Balance Sheet | ||||||
| Cash and equivalents | 107,490 | 113,658 | 115,942 | 115,177 | 136,907 | 152,610 |
| Accounts receivable | 10,091 | 10,360 | 10,462 | 10,484 | 10,430 | 17,325 |
| Inventory | 4,591 | 5,733 | 6,713 | 9,456 | 7,669 | 14,778 |
| Other current assets | 12,149 | 16,012 | 21,169 | 21,169 | 21,169 | 21,169 |
| Current assets | 134,321 | 145,764 | 154,285 | 156,285 | 176,174 | 205,882 |
| Net PP&E/Fixed assets | 41,135 | 46,936 | 51,472 | 60,979 | 57,943 | 52,867 |
| Net intangibles | 239 | 505 | 475 | 352 | 345 | 214 |
| Other long-term assets | 19,443 | 23,322 | 14,555 | 14,555 | 14,555 | 14,555 |
| Non-current assets | 60,817 | 70,763 | 66,502 | 75,885 | 72,842 | 67,635 |
| Total assets | 195,138 | 216,527 | 220,787 | 232,170 | 249,017 | 273,517 |
| Accounts payable | 1,731 | 1,855 | 1,728 | 2,224 | 2,370 | 3,653 |
| Short-term debt | - | 203 | - | - | - | - |
| Other current liabilities | 27,787 | 28,520 | 28,021 | 28,214 | 31,194 | 35,899 |
| Current liabilities | 29,517 | 30,578 | 29,749 | 30,439 | 33,564 | 39,551 |
| Long-term debt | - | - | - | - | - | - |
| Other long-term liabilities | 110 | 561 | 171 | 171 | 171 | 171 |
| Non-current liabilities | 110 | 561 | 171 | 171 | 171 | 171 |
| Total liabilities | 29,627 | 31,139 | 29,919 | 30,609 | 33,735 | 39,722 |
| Common stock | 1,335 | 1,335 | 1,335 | 1,335 | 1,335 | 1,335 |
| Retained earnings | 160,871 | 175,969 | 185,818 | 196,752 | 210,722 | 229,485 |
| Other common equity | 3,305 | 6,215 | 1,714 | 1,714 | 1,714 | 1,714 |
| Total common equity | 165,510 | 183,519 | 188,867 | 199,801 | 213,771 | 232,534 |
| Minority interest | - | 1,869 | 2,001 | 1,760 | 1,511 | 1,261 |
| Total equity | 165,510 | 185,388 | 190,868 | 201,561 | 215,282 | 233,795 |
| BVPS | 1,226.07 | 1,369.51 | 1,410.38 | 1,498.06 | 1,590.78 | 1,736.96 |
| Cash conversion cycle | ||||||
| Account receivable days | 68 | 63 | 62 | 62 | 50 | 50 |
| Inventory days | 71 | 67 | 75 | 90 | 82 | 82 |
| Net payable days | 25 | 23 | 22 | 22 | 22 | 22 |
| Cash conversion cycle | 114 | 106 | 116 | 130 | 110 | 110 |
| Ratios | ||||||
| ROE (common equity) | 11% | 15% | 11% | 11% | 13% | 17% |
| ROA | 9% | 13% | 10% | 10% | 12% | 14% |
| Net debt to total equity | -67% | -64% | -64% | -60% | -67% | -68% |
| Total liabilities to total assets | 15% | 14% | 14% | 13% | 14% | 15% |
| Dupont analysis | ||||||
| Asset turnover | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 | 0.4 |
| Leverage (assets to equity) | 1.2 | 1.2 | 1.2 | 1.2 | 1.2 | 1.2 |
| Net margin | 36.7% | 43.6% | 34.8% | 35.1% | 36.3% | 36.7% |
| ROE (total equity) | 11% | 15% | 11% | 11% | 13% | 17% |
Source: Company data, Goldman Sachs Global Investment Research
Exhibit 14: Largan cash flow
| NT$ mn | 2023 | 2024 | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|---|---|
| Cash flow statement | ||||||
| Net income | 22,102 | 32,174 | 25,900 | 21,666 | 27,682 | 37,180 |
| Minority interest add-back | - | (296) | (285) | (241) | (249) | (250) |
| Depreciation and amortization add-back | 5,422 | 6,230 | 7,732 | 8,566 | 12,428 | 12,399 |
| (Increase)/decrease in working capital | (1,400) | (1,287) | (1,208) | (2,268) | 1,986 | (12,722) |
| Other operating cash flow items | (7,925) | (5,243) | (6,059) | - | - | - |
| Cash flow from operating | 18,199 | 31,579 | 26,080 | 27,723 | 41,847 | 36,607 |
| Capital expenditure | (8,237) | (11,133) | (12,340) | (17,849) | (9,160) | (7,091) |
| Other investment cash flow items | (2,915) | (4,933) | 3,104 | (100) | (225) | (100) |
| Cash flow from investing | (11,151) | (16,066) | (9,236) | (17,949) | (9,385) | (7,191) |
| Dividends paid | (11,412) | (9,009) | (13,013) | (10,539) | (10,732) | (13,712) |
| Change in common stock | - | - | - | - | - | - |
| Increase/(decrease) in short-term debt | (19) | 203 | (203) | - | - | - |
| Increase/(decrease) in long-term debt | - | - | - | - | - | - |
| Other financing cash flow items | 1,680 | (1,958) | (241) | - | - | - |
| Cash flow from financing | (9,750) | (10,764) | (13,458) | (10,539) | (10,732) | (13,712) |
| Net change in cash | (2,682) | 6,168 | 2,283 | (765) | 21,730 | 15,703 |
| FCF | 9,962 | 20,446 | 13,740 | 9,874 | 32,687 | 29,515 |
| Ratio | ||||||
| Capex to revenue | 17% | 19% | 20% | 29% | 12% | 7% |
Source: Company data, Goldman Sachs Global Investment Research
e92c7a75ab8b4efbba794e6b187208c8
Price Target Risks and Methodology - Largan
Valuation: We are Buy rated on Largan and have a 12-month target price of NT$11,000, which is based on discounted PE. Our target P/E multiple of 29.8x is derived from (1) peers' avg. ratio of trading PE to forward year fundamentals (NI YoY and OPM), which is at 0.5x, and (2) Largan's forward year fundamentals: 2030-31E NI YoY at 19% on avg. and OPM at 41% on avg. We apply the target PE multiple to Largan's 2030E EPS and discount it back to 2027E via a COE of 10.7%, which is based on beta at 1.1x, risk free at 3.5%, and market risk premium at 6.5%. Our target price of NT$11,000 implies 39.8x 2028E PE, the first full year of FAU contribution, which is within Largan's historical trading range of 8.0x to 45.1x, reflecting our positive view on Largan's expansion from handset lens to FAU, which broadens its exposure from consumer electronics to AI data center that enjoys strong market growth, and could support a valuation re-rating. We note that Taiwan AI supply chain also enjoys re-rating when expanding from consumer electronics to AI data center. Maintain Buy.
Key risks: (1) slower-than-expected smartphone market growth, (2) fiercer competition in handset lenses, (3) slower-than-expected smartphone camera lens specification upgrades or Largan's handset lens pixel mix upgrade, (4) slower-than-expected FAU ramp up, and (5) fiercer competition in FAU.
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