PDF 原檔：報告_MS_大立光3008玉晶光3406_升評_20261012_original.pdf
圖片清單（已驗證 2026-10-14）
ingest 時建立的「眼見為憑」圖片索引；lib/ 嵌圖只從此挑「真資料圖」。本份報告圖皆為評等／目標價／股價類財務圖，公司頁依規則不嵌。_002～_008 皆 <40KB，預設為小圖表／logo，未逐張 Read。
| 檔名 | size | 分類 | 親眼所見內容 |
|---|---|---|---|
報告_MS_大立光3008玉晶光3406_升評_20261012_001.png |
49KB | 真資料圖 | Consensus Price Target Distribution（NT$410.00–NT$1,415.00，標示 Mean 與 MS PT）與 Risk Reward Chart：股價 2025-10 至 2026-10，現價 NT$1,060.00，PT NT$1,070.00（+0.94%），Bull NT$1,834.00（+73.02%），Bear NT$658.00（-37.92%）；數值對應玉晶光 |
報告_MS_大立光3008玉晶光3406_升評_20261012_009.png |
50KB | 真資料圖 | 玉晶光評等與目標價沿革圖（2023-10 至 2026-10，O/I、E/I、U/I 標記，目標價階梯標註含 450、500、700、800、650、520、400、430、425、910） |
報告_MS_大立光3008玉晶光3406_升評_20261012_010.png |
58KB | 真資料圖 | 大立光評等與目標價沿革圖（2023-10 至 2026-10，O/I、E/I 標記，目標價階梯標註含 2700、2300、3000、3250、3800、2800、3200、2500、2450、4830、7100） |
原始內容
M Idea October 12, 2026 09:00 PM GMT
Greater China Technology Hardware | Asia Pacific
Higher OE Estimates, Upgrade Largan and Genius
Following our semi team's increase in optical engine (OE) estimates, we raise our fiber arra unit (FAU) estimates accordingl and thus upgrade Largan to OW and Genius to EW.
Key Takeaways
- We trim Largan's traditional business value to NT$2,800 share but raise FAU business to NT$6,240 share, from which we derive a new PT of NT$9,040.
- We value Genius's traditional business at NT$600 share and FAU business at NT $470 share, from which we derive a new PT of NT$1,070.
- We are more positive on FAU's TAM but, we think FAU's coupling matching could be an overhang to our higher OE FAU shipment estimates in 2027-28.
Raising FAU estimates after upstream semi team's OE estimates changes: Our OE shipment forecasts increase by 128% 52% to 17.73mn 73.87mn in 2027 28 (see full report). As OE and FAU are 1:1, we raise our FAU volume forecasts accordingly, while key other assumptions are unchanged, which resulted in an FAU TAM increase from US$778mn to US$1.773bn in 2027e and from US$4.86bn to US$7.387bn in 2028e. This significant FAU TAM increase leads to the changes below.
We now va ue Largan at NT$9,040/share, or 36% upside potentia : Our analysis suggests that Largan's share price already embeds >30% global market share in FAU before formal production starts in 2H27 or even 2028. But our revised assumptions suggest further upside if Largan successfully ramps up production and gains meaningful market share. To reflect 3Q earnings miss, we trim our intrinsic value estimates from NT$3,000 to NT$2,800 per share for the company's traditional business, while our TAM analysis derives a value of NT$6,240 share for CPO FAU new business, bringing the price target to NT$9,040. Considering the stronger growth potential in 2028, we upgrade the stock to OW from EW.
We now va ue Genius at NT$1,070/share, upgrade to EW: Similarly, we believe Genius's share price is also affected by hopes for FAU components. Using a similar approach, we conclude that the aggregate value is NT$1,070 share (NT$600 for existing business and NT$470 share for the FAU component business). We therefore see a more balanced risk reward and hence move to EW.
Key risks to our ca : While upstream semi capacity and yield might have already improved, we believe the yield of FAU coupling matching will be a key overhang. Any lower-than-expected yield could result in shipment misses for FAU and OE. If the yield is not ideal, key customers are less likely to place large orders despite upstream capacity being ready. On the upside, earlier-than-expected mass production and more rapid volume growth could drive upside to our estimates.
Morgan Stanley Asia Limited+
Andy Meng, CFA
Equity Analyst Andy.M ng@morganstanl y.com
Betty Chen
R s arch Associat B tty.H.Ch n@morganstanl y.com
Greater China Technology Hardware
Asia Pacific Industry View In-Line
| What's Changed Genius Electronic Optical Co. Ltd. (3406.TW) Rating Price Target | rom Underweight NT$910.00 | To Equal-wei ht NT$1,070.00 |
|---|---|---|
| Largan Precision (3008.TW) Rating Price Target | rom Equal-weight NT$ ,100.00 | To Overwei ht NT$9,040.00 |
+852 2239-7689
+852 2239-7213
Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment decision.
For analyst certification and other important disclosures, refer to the Disclosure Section, located at the end of this report.
= Analysts employed by non-U.S. affiliates are not registered with FINRA, may not be associated persons of the member and may not be subject to FINRA restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
M Idea
Executive Summar
Higher optical engine shipment assumptions as yields improve
Our semi team has lifted their optical engine shipment assumptions following their latest supply-chain checks. While PIC production remains a bottleneck, improving SoIC yields and downstream assembly yields should support a faster OE ramp. They now expect OE production to reach 2mn 59mn 148mn units in 2026 27 28, with actual OE shipments reaching 0.39mn 17.73mn 73.87mn units, respectively. In particular, they assume the SoIC yield improves from 50% in 2026 to 95% in 2027 onwards, while downstream assembly yield rises from 20% in 2026 to 30% 50% in 2027 28. We believe this provides greater confidence in the CPO volume ramp, although downstream assembly and testing remain key gating factors for how quickly OE shipments can scale.
Exhibit 1: Optical ngin assumptions: N w vs. Old
| Metric | Assumption | 2026E | 2027E | 2028E |
|---|---|---|---|---|
| TSMC PIC capacity (kwpm) | Latest | 0.5 | 8.0 | 20.0 |
| Old | 0.5 | 10.0 | 25.0 | |
| % change | 0% | -20% | -20% | |
| Die per wafer | Latest | 648 | 648 | 648 |
| Old | 648 | 648 | 648 | |
| Annual PIC production (mn) | Latest | 4.0 | 62.0 | 156.0 |
| Old | 4.0 | 78.0 | 194.0 | |
| % change | 0% | -21% | -20% | |
| SoIC yield rate | Latest | 50% | 95% | 95% |
| Old | 50% | 50% | 50% | |
| % change | 0% | 45% | 45% | |
| Optical engine production (mn) | Latest | 2.0 | 59.0 | 148.0 |
| Old | 2.0 | 39.0 | 97.0 | |
| % change | 0% | 51% | 53% | |
| Downstream assembly yield rate | Latest | 20% | 30% | 50% |
| Old | 20% | 20% | 50% | |
| % change | 0% | 10% | 0% | |
| Actual optical engine shipment (mn) | Latest | 0.39 | 17.73 | 73.87 |
| Old | 0.39 | 7.78 | 48.60 | |
| % change | 0% | 128% | 52% |
Sourc : Company data, Morgan Stanl y R s arch (E) stimat s
Largan Larger CPO/FAU upside; upgrade to OW
Based on the semi team's assumption revision, we lift our CPO optical engine volume assumptions for 2027-28e while keeping other assumptions unchanged:
- We forecast CPO optical engine volume to increase from 0.39mn in 2026 to 17.73mn in 2027, with a further surge to 73.87mn in 2028. Consequently, FAU (Fiber Array Units - vital optical interconnect components that align multiple optical fibers with silicon chips, making them critical for Co-Packaged Optics) volumes for CPO also grow from 0.39mn to 73.87mn in the same period;
- We assume FAU ASP of US$100 in 2026-28 (average market level);
- We forecast Largan's FAU market share to increase from 0% in 2026 to 5% in 2027 and 40% in 2028.
- Assuming net margins of 10% in 2027 and 30% in 2028, we forecast FAU earnings of US$9mn in 2027 and US$882mn in 2028.
M Idea
If we value the FAU business at 35x 2028e P E (industry peers are at 40-50x P E, but we use a more conservative multiple to reflect the first year of scalable production), this implies an incremental market cap of US$30.862bn. Discounting this back to 2026 at a 10% rate, we derive a per share positive impact of NT$6,240.
Exhibit 2: Bas Cas - Pot ntial Positiv Impact from FAU N w Busin ss for Largan
| 2026E | 2027E | 2028E | |
|---|---|---|---|
| Optical Engine Volume (mn) | 0.39 | 17.73 | 73.87 |
| FAU Volume (mn units) | 0.39 | 17.73 | 73.87 |
| ASP (USD) | 100 | 100 | 100 |
| Total TAM (US$ mn) | 39 | 1,773 | 7,387 |
| Largan's Market Share | 0% | 5% | 40% |
| FAU Revenue for Largan (US$ mn) | 0 | 89 | 2,939 |
| Net Margin | n.a. | 10% | 30% |
| FAU Earnings for Largan (US$ mn) | n..a | 9 | 882 |
| Assumed Forward P/E | 35 | ||
| Market Cap in USD (mn) | 30,862 | ||
| Market Cap in TWD (mn) | 987,578 | ||
| Per share impact | 6,240 | 6,864 | 7,550 |
| Sourc : Morgan Stanl y R s arch (E) stimat s. |
3Q26 resu ts miss; revising down traditiona business estimates. Largan reported 3Q26 revenue of NT$15.65bn, down 11% YoY, with gross margin declining to 42.2% and net income of NT$5.18bn, down 27% YoY. The weaker-than-expected gross margin, mainly due to lower new-product yields and higher structural green-power costs, resulted in a meaningful earnings miss. Together with softer smartphone order momentum, we lower our 2026-28 revenue estimates by 5-6% and gross margin assumptions to 45.8% 44.5% 47.5%, resulting in 12% 16% 9% downward revisions to our 2026-28 earnings estimates, respectively. For more details, please refer to Earnings Estimate Revision section.
We remain positive on Largan's CPO FAU opportunity given the company's strong track record in high-precision manufacturing relative to most Taiwan peers. Following our semi team's higher optical engine shipment assumptions, we see a meaningfully larger FAU addressable market in 2027-28. More recently, Largan indicated that its first FA project has effectively passed customer verification and that it is expanding from FA into FAU, including coupling and potential FAU-to-carrier assembly, with dedicated capacity expected to support mass production from around mid-2027 2H27. While the current share price already reflects some CPO FAU expectations, our revised assumptions suggest further upside if Largan successfully ramps production and gains meaningful market share. We set our price target at NT$9,040, comprising NT$2,800 from the traditional business and NT$6,240 from the CPO FAU business.
Genius Higher CPO/FAU optionality; upgrade to EW
M Idea
Similar to Largan, following semi-team's higher assumptions, we also lift our CPO optical engine volume assumptions for 2027-2028e while keeping other assumptions unchanged.
- We apply the same FAU volume and ASP assumptions as we do for Largan.
- We expect Genius to be involved in FAU components, rather than overall solutions; therefore, we assume components TAM to be 15% of the FAU TAM.
- We forecast Genius's market share to increase from 0% in 2026 to 5% in 2027 and 30% in 2028.
- Assuming net margins of 10% in 2027 and 25% in 2028, we forecast FAU component earnings of US$1mn in 2027 and US$81mn in 2028.
If we value the FAU component business at 25x 2028e P E (lower multiple than Largan because Genius has smaller scale), it could introduce incremental market cap of US $2,004mn. Discounting it back to 2026 at a 10% discounted rate, we derive a per-share positive impact of NT$470.
Exhibit 3: Bas Cas - Pot ntial Positiv Impact from FAU N w Busin ss for G nius
| 2026E | 2027E | 2028E | |
|---|---|---|---|
| Optical Engine Volume (mn) | 0.39 | 17.73 | 73.87 |
| FAU Volume (mn units) | 0.39 | 17.73 | 73.87 |
| ASP (USD) | 100 | 100 | 100 |
| Total TAM (US$ mn) | 39 | 1,773 | 7,387 |
| 15% Share of Components TAM | 6 | 266 | 1,108 |
| Genius's Market Share | 0% | 5% | 30% |
| FAU Component Revenue for Genius (US$ mn) | 0 | 13 | 331 |
| Net Margin | n.a. | 10% | 25% |
| FAU Component Earnings for Genius (US$ mn) | n..a | 1 | 81 |
| Assumed Forward P/E | 25 | ||
| Market Cap in USD (mn) | 2,004 | ||
| Market Cap in TWD (mn) | 64,114 | ||
| Per share impact | 470 | 517 | 569 |
Sourc : Morgan Stanl y R s arch stimat s
Similar to Largan, our residual income model derives an intrinsic value of NT$600 share for the traditional business, while the TAM analysis suggests CPO FAU-related opportunities could be valued at NT$470 share. Adding these together, we raise our price target materially to NT$1,070.
Given Largan's traditional business has faced margin headwinds in 3Q26 due to the application of green power, it's reasonable to expect that Genius could also face similar customer requirements on green power. However, as Genius has more production capacity in mainland China, we believe it could face less significant cost pressure. We therefore maintain our estimates unchanged at this stage and will monitor margin development in the upcoming quarterly results.
M Idea
Earnings Estimate Revision
Largan reported 3Q26 revenue of NT$15.65bn (-11% YoY) and net income of NT$5.18bn (- 27% YoY), with gross margin declining to 42.2%. Following weaker-than-expected 3Q26 results, softer smartphone order momentum and a lower gross margin outlook due to new-product yield pressure and higher green-power costs, we lower our revenue and GPM estimates for 2026-28, resulting in 9-16% downward earnings revisions over the period.
Exhibit 4: Earnings r visions: N w vs. Old
| NT$ mn | New - 2026E | New - 2027E | New - 2028E | Old - 2026E | Old - 2027E | Old - 2028E | New vs Old - 2026E | New vs Old - 2027E | New vs Old - 2028E |
|---|---|---|---|---|---|---|---|---|---|
| Net sales | 62,665 | 70,887 | 72,868 | 66,920 | 74,757 | 77,025 | -6% | -5% | -5% |
| % Growth YoY | 2% | 13% | 3% | 9% | 12% | 3% | |||
| Gross profit | 28,696 | 31,569 | 34,629 | 33,103 | 36,834 | 37,952 | -13% | -14% | -9% |
| % margin | 45.8% | 44.5% | 47.5% | 49.5% | 49.3% | 49.3% | -4% | -5% | -2% |
| Net income | 21,308 | 22,536 | 25,639 | 24,179 | 26,707 | 28,204 | -12% | -16% | -9% |
| % Growth YoY | 0% | 6% | 14% | 14% | 10% | 6% | |||
| % margin | 34% | 32% | 35% | 36% | 36% | 37% | -2% | -4% | -1% |
| EPS (NT$) | 162.90 | 172.30 | 196.02 | 184.85 | 204.18 | 215.63 | -12% | -16% | -9% |
Sourc : Morgan Stanl y R s arch (E) stimat s.
M Idea
Valuation and Price Target Revisions
Largan: For the traditional business, we lower our earnings and medium-term growth rate; as a result, our intrinsic value in our base case scenario is adjusted down to NT$2,800 from NT$3,000. We use RIM valuation methodology for Greater China Hardware Tech companies in our coverage. We apply an unchanged CoE of 8.5%, a medium-term growth rate of 8% (from 7% previously on higher 2026e estimates), and a long-term growth rate of 3% (unchanged). However, we believe the upward revision to optical engine shipment assumptions materially increases the addressable market and earnings potential for Largan's FAU business. Therefore, we add the base case per share positive value from FAU based on the analysis in the previous section. The new SOTP valuation derives a new price target at NT$9,040 (from NT$7,100). We also raise our bull case and bear case values to NT$11,426 (from NT$11,142.80) and NT$4,620 (from NT$3,649.20).
Genius: For the traditional business, we make no earnings and intrinsic value revisions; as a result, our intrinsic value under our base case scenario is unchanged at NT$600. We use RIM valuation methodology for Greater China Hardware Tech companies in our coverage. We apply a CoE of 8.5%, a medium-term growth rate of 4%, and a long-term growth rate of 3%. However, we believe the upward revision to optical engine shipment assumptions increases the potential value of Genius's FAU opportunity, although execution visibility remains lower than for more established suppliers. Therefore, we add the base case per share positive value from FAU based on the analysis in the previous section. The new SOTP valuation derives a new price target at NT$1,070 (from NT$910). We also raise our bull case and bear case values to NT$1,834 (from NT$1,705.20) and NT$658 (from NT $592.40).
Exhibit 5: SOTP/RI valuation: Largan
RI Valuation - Base case
| Rmb mn | 2026E | 2027E | 2028E | 2029E | 2030E | 2031E | 2032E | 2033E | 2034E | 2035E | 2036E |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Total equity | 212,176 | 234,712 | 260,351 | 273,729 | 288,178 | 303,783 | 320,636 | 338,834 | 358,484 | 379,510 | 401,772 |
| Revenue | 62,665 | 70,887 | 72,868 | 78,697 | 84,993 | 91,793 | 99,136 | 107,047 | 115,589 | 123,681 | 130,953 |
| Net profit | 21,308 | 22,536 | 25,639 | 26,757 | 28,898 | 31,209 | 33,706 | 36,396 | 39,300 | 42,051 | 44,524 |
| YoY % | 0% | 6% | 14% | 4% | 8% | 8% | 8% | 8% | 8% | 7% | 6% |
| ROE | 11% | 11% | 11% | 10% | 11% | 11% | 11% | 11% | 12% | 12% | 12% |
| Residual income | 5,080 | 4,497 | 5,683 | 4,622 | 5,625 | 6,708 | 7,878 | 9,135 | 10,492 | 11,572 | 12,257 |
| Terminal value | 229,453 | ||||||||||
| Discount factor | 1.00 | 0.92 | 0.85 | 0.78 | 0.72 | 0.66 | 0.61 | 0.56 | 0.52 | 0.48 | 0.44 |
| Equity value (NT$) | 366,249 | ||||||||||
| Implied P/E (X) | 17.2 | 16.3 | |||||||||
| # of shares | 131 | ||||||||||
| Per share value (NT$) | 2,800 | ||||||||||
| FAU Positive Impact/Share | 6,240 | ||||||||||
| Aggregate Value/Share | 9,040 |
Sourc : Morgan Stanl y R s arch (E) stimat s.
Exhibit 6: SOTP/RI valuation: G nius
Genius (3406.TW)
| Residual income model | 2033E | 2034E | 2035E | 2036E | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Rmb mn Total equity | 2026E 28,984 | 2027E 31,852 | 2028E 34,894 | 2029E 37,855 | 2030E 40,963 | 2031E 44,227 | 2032E 47,487 | 50,845 | 54,304 | 57,866 | 61,502 |
| Revenue | 29,825 | 32,165 | 34,176 | 35,884 | 37,679 | 39,563 | 40,750 | 41,972 | 43,231 | 44,528 | 45,864 |
| Net profit | 5,000 | 5,736 | 6,086 | 5,921 | 6,217 | 6,528 | 6,520 | 6,716 | 6,917 | 7,124 | 7,273 |
| YoY% | 35% | 15% | 6% | -3% | 5% | 5% | 0% | 3% | 3% | 3% | 2% |
| ROE% | 19% | 20% | 19% | 17% | 16% | 16% | 15% | 14% | 14% | 13% | 13% |
| Residual income | 2,748 | 3,272 | 3,378 | 2,954 | 2,998 | 3,045 | 2,760 | 2,678 | 2,594 | 2,507 | 2,353 |
| Equity value (NT$) | 67,642 | ||||||||||
| # of shares | 113 | ||||||||||
| Implied P/E (x) | 13.5 | ||||||||||
| Per share value (NT$) | 600.0 | ||||||||||
| FAU Positive Impact/Share | 470.0 | ||||||||||
| Aggregate Value/Share | 1,070 |
Sourc : Morgan Stanl y R s arch (E) stimat s.
M Idea
Genius: Financial Summar
Exhibit 7: G nius: Financial Summary
Genius (3406.TW)
Financial Summary
| Profit and Loss Statement | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|
| Net Sales | 24,989 | 29,825 | 32,165 | 34,176 |
| COGS | (16,864) | (19,219) | (20,710) | (22,004) |
| Gross Profit | 8,125 | 10,606 | 11,455 | 12,171 |
| Selling | (277) | (328) | (396) | (421) |
| G&A | (986) | (1,154) | (1,253) | (1,318) |
| R&D | (2,089) | (2,455) | (2,601) | (2,762) |
| Operating Income | 4,773 | 6,668 | 7,206 | 7,671 |
| Finance costs, net | 66 | 256 | 256 | 256 |
| Others | 152 | (199) | 200 | 200 |
| Pre-tax Income | 4,990 | 6,725 | 7,661 | 8,127 |
| Income Tax | (1,282) | (1,710) | (1,910) | (2,026) |
| Profit for the year | 3,708 | 5,015 | 5,751 | 6,101 |
| Minority interests | 6 | 15 | 15 | 15 |
| Net Income | 3,702 | 5,000 | 5,736 | 6,086 |
| EPS for consensus (NT$) | 32.8 | 44.3 | 50.9 | 54.0 |
| EBITDA | 4,773 | 6,668 | 7,206 | 7,671 |
| Balance Sheet | 2025 | 2026E | 2027E | 2028E |
| CCE | 12,894 | 12,964 | 15,620 | 16,301 |
| Inventory | 2,115 | 3,173 | 4,759 | 7,139 |
| Trade receivables | 5,640 | 5,843 | 6,541 | 6,617 |
| Other current assets | 728 | 728 | 728 | 728 |
| Total current assets | 21,378 | 22,708 | 27,649 | 30,786 |
| Net PPE | 18,991 | 17,639 | 15,984 | 14,025 |
| Other non-current assets | 3,271 | 5,814 | 8,728 | 11,820 |
| Total non-current assets | 22,263 | 23,453 | 24,712 | 25,845 |
| Trade payables | 2,631 | 1,926 | 2,984 | 2,233 |
| Borrowings - short term | 383 | 383 | 383 | 383 |
| Other current liabilities | 5,632 | 3,858 | 3,263 | 2,200 |
| Total current liabilities | 8,646 | 6,167 | 6,630 | 4,815 |
| Borrowings - long term | 2,759 | 2,759 | 2,759 | 2,759 |
| Other non-current liabilities | 5,752 | 5,752 | 5,752 | 5,752 |
| Total non-current liabilities | 8,511 | 8,511 | 8,511 | 8,511 |
| Net Assets | 26,484 | 31,484 | 37,220 | 43,305 |
| Paid-in capital | 1,127 | 1,127 | 1,127 | 1,127 |
| Capital reserves | 25,356 | 30,356 | 36,092 | 42,178 |
| Total shareholder's equity | 26,484 | 31,484 | 37,220 | 43,305 |
| Cash Flow Statement | 2025 | 2026E | 2027E | 2028E |
| Cashflow from operations | 7,312 | 5,569 | 8,525 | 6,724 |
| Net income | 3,702 | 5,000 | 5,736 | 6,086 |
| Depreciation+Amortization | 4,009 | 4,309 | 4,609 | 4,909 |
| Others | (400) | (3,740) | (1,821) | (4,271) |
| Cashflow from investing | (2,992) | (3,000) | (3,000) | (3,000) |
| Capex | (1,602) | (3,000) | (3,000) | (3,000) |
| Others | (1,389) | - | - | - |
| Cashflow from financing | (4,816) | (2,500) | (2,868) | (3,043) |
| Dividend paid Others | (2,029) | (2,500) - | (2,868) - | (3,043) - |
| (2,787) | ||||
| Changes in cash | (379) | 69 | 2,657 | 681 |
Sourc : Company data, Morgan Stanl y R s arch (E) stimat s M Idea
| Ratio Analysis | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|
| Growth % | ||||
| Net Sales | 8% | 19% | 8% | 6% |
| Gross Profit | 1% | 31% | 8% | 6% |
| EBIT | 0% | 40% | 8% | 6% |
| EBITDA | 0% | 40% | 8% | 6% |
| Net income | -14% | 35% | 15% | 6% |
| Margins % | ||||
| Gross Margin | 32.5% | 35.6% | 35.6% | 35.6% |
| EBIT Margin | 19.1% | 22.4% | 22.4% | 22.4% |
| EBITDA Margin | 19.1% | 22.4% | 22.4% | 22.4% |
| Net Profit Margin | 14.8% | 16.8% | 17.8% | 17.8% |
| Return% | ||||
| ROE | 14% | 16% | 15% | 14% |
| ROA | 8% | 11% | 11% | 11% |
| Gearing % | ||||
| Net Debt/Equity | -29% | -25% | -28% | -26% |
| Liabilities/Equity | 65% | 47% | 41% | 31% |
| Valuation | 2025 | 2026E | 2027E | 2028E |
| Multiples | ||||
| P/E | 32.1 | 23.8 | 20.7 | 19.5 |
| P/B | 4.5 | 3.8 | 3.2 | 2.7 |
| P/S | 4.8 | 4.0 | 3.7 | 3.5 |
| EV/EBITDA | 22.8 | 16.3 | 15.1 | 14.2 |
Risk Reward - Genius Electronic Optical Co. Ltd. (3406.TW) Risk Reward - Genius Electronic Optical Co. Ltd. (3406.TW)
Higher FAU optionality; EW
NT$1,070.00 PRICE TARGET
Base case: Our price target is based on an SOTP valuation, comprising the traditional business and potential FAU opportunity. We value the traditional business using a residual income model, consistent with our Greater China Tech coverage, assuming an 8.5% cost of equity, a medium-term net profit CAGR of 4% and a 3% terminal growth rate. We separately value the FAU component opportunity based on our TAM and market-share assumptions.
NT$763.75
Source: Refinitiv, Morgan Stanley Research
BULL CASE
BASE CASE
EQUAL-WEIGHT THESIS
- ▪Genius should benefit from iPhone 18 variable-aperture, foldable and periscope camera upgrades as a major Apple opticallens supplier.
- ▪Higher OE shipment assumptions increase the addressable FAU market and potential value of Genius's FAU component opportunity.
- ▪However, Genius is exposed to only around 15% of the overall FAU TAM, while execution visibility remains lower than for more established suppliers. We therefore see a more balanced risk/reward and hence we are EW.
Risk Reward Themes
Secular Growth:
Positive
View descriptions of Risk Rewards Themes here
BEAR CASE
36x 2027E base case EPS
Stronger iPhone demand and faster FAU development: We assume: 1) stronger-thanexpected iPhone orders; 2) faster penetration of variable-aperture, foldable and periscope lenses; and 3) faster FAU component adoption and greater marketshare gains.
21x 2027E base case EPS
iPhone camera upgrades support the traditional business, with incremental FAU contribution: We assume: 1) benefits from variable-aperture, foldable and periscope upgrades; 2) Genius ' s FAU component market share reaches 5% in 2027 and 30% in 2028; and 3) FAU components represent 15% of the overall FAU TAM.
NT$658.00
13x 2027E base case EPS
Weaker iPhone demand and slower FAU development: We assume: 1) weaker-thanexpected iPhone demand; 2) slower cameraupgrade penetration and greater pricing pressure; and 3) delays in FAU component commercialization and market-share gains.
NT$1,834.00
NT$1,070.00
M Idea
Risk Reward - Genius Electronic Optical Co. Ltd. (3406.TW)
KEY EARNINGS INPUTS
| Drivers | Dec 2025 | Dec 2026eDec | 2027eDec | 2028e |
|---|---|---|---|---|
| Total smartphone shipment YoY (%) | 2.1 | (12.7) | 3.3 | 1.0 |
| iPhone revenue YoY (%) | 0.0 | 0.0 | 0.0 | 0.0 |
| VR revenue YoY (%) | 0.0 | 0.0 | 0.0 | 0.0 |
INVESTMENT DRIVERS
- VR shipments
- iPhone shipments
GLOBAL REVENUE EXPOSURE
Source: Morgan Stanley Research Estimate View explanation of regional hierarchies here
RISKS TO PT/RATING
RISKS TO UPSIDE
- More share gains in iPhones
- Better-than-expected mixed reality demand from Apple
- Better-than-expected VR/MR shipments
- Faster-than-expected business development in CPO/NPO
RISKS TO DOWNSIDE
- Delays in Apple's mixed reality shipments
- Share loss in iPhones
- Execution/yield
- Slower VR/MR shipments
OWNERSHIP POSITIONING
Inst. Owners, % Active
60.9%
Source: Refinitiv, Morgan Stanley Research
MS ESTIMATES VS. CONSENSUS
Source: Refinitiv, Morgan Stanley Research M Idea
Largan: Financial Summar
Exhibit 8: Largan: Financial Summary
Financial Summary
| Profit and Loss Statement | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|
| Net Sales | 61,148 | 62,665 | 70,887 | 72,868 |
| COGS | (30,311) | (33,969) | (39,318) | (38,239) |
| Gross Profit | 30,837 | 28,696 | 31,569 | 34,629 |
| Selling | (376) | (387) | (441) | (453) |
| G&A | (1,609) | (1,530) | (1,731) | (1,779) |
| R&D | (3,123) | (3,183) | (3,607) | (3,709) |
| Employee Bonus | (2,171) | (2,215) | (2,539) | (2,609) |
| Operating Income | 23,558 | 21,380 | 23,252 | 26,078 |
| Finance costs, net | 4,260 | 4,106 | 5,000 | 6,000 |
| Investment income | 2 | - | - | - |
| Others | (1,920) | 678 | - | - |
| Pre-tax Income | 25,900 | 26,163 | 28,252 | 32,078 |
| Income Tax | (4,340) | (4,586) | (5,446) | (6,169) |
| Profit for the year | 21,560 | 21,578 | 22,806 | 25,909 |
| Minority interests | (285) | (270) | (270) | (270) |
| Net Income | 21,275 | 21,308 | 22,536 | 25,639 |
| EPS for consensus (NT$) | 159.4 | 162.9 | 172.3 | 196.0 |
| EBITDA | 23,558 | 21,380 | 23,252 | 26,078 |
| Balance Sheet | 2025 | 2026E | 2027E | 2028E |
| CCE | 131,295 | 132,127 | 135,131 | 141,206 |
| Inventory Trade receivables | 6,713 10,462 | 10,070 9,649 | 15,105 9,824 | 22,657 9,088 |
| Other current assets | 5,816 | 5,816 | 5,816 | 5,816 |
| Total current assets | 154,285 | 157,662 | 165,876 | 178,767 |
| Net PPE | 51,472 | 50,855 | 49,430 | 47,196 |
| Other non-current assets | 15,029 | 25,792 | 36,579 | 47,990 |
| Total non-current assets | 66,502 | 76,647 | 86,009 | 95,187 |
| Trade payables | 1,728 | 2,324 | 3,228 | 3,767 |
| Borrowings - short term | - | - | - | - |
| Other current liabilities | 28,021 | 19,639 | 13,774 | 9,666 |
| Total current liabilities | 29,749 | 21,962 | 17,002 | 13,433 |
| Borrowings - long term | - | - | - | - |
| Other non-current liabilities | 171 | 171 | 171 | 171 |
| Total non-current liabilities | 171 | 171 | 171 | 171 |
| Net Assets | 190,868 | 212,176 | 234,712 | 260,351 |
| Paid-in capital | 1,335 | 1,335 | 1,335 | 1,335 |
| Capital reserves | 189,533 | 210,841 | 233,377 | 259,016 |
| Total shareholder's equity | 190,868 | 212,176 | 234,712 | 260,351 |
| Cash Flow Statement | 2025 | 2026E | 2027E | 2028E |
| Cashflow from operations | 26,080 | 19,510 | 21,698 | 25,385 |
| Net income | 21,275 | 21,308 | 22,536 | 25,639 |
| Depreciation+Amortization | 7,732 | 8,532 | 9,332 | 10,132 |
| Others | (2,927) | (10,330) | (10,170) | (10,386) |
| Cashflow from investing | (9,236) | (8,000) | (8,000) | (8,000) |
| Capex | (12,338) | (8,000) | (8,000) | (8,000) |
| Others | 3,102 | - | - | - |
| Cashflow from financing Net borrowings | (13,458) | (10,677) | (10,694) | (11,310) - |
| Dividend paid | (212) (11,412) | - (10,677) | - (10,694) | (11,310) |
| Others | - | - | - | |
| Proceeds from new issues | - | - | - | - |
| (1,834) | ||||
| Changes in cash | 2,283 | 832 | 6,075 | |
| 3,004 |
Sourc : Company data, Morgan Stanl y R s arch (E) stimat s M Idea
| Ratio Analysis | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|
| Growth % | ||||
| Net Sales | 3% | 2% | 13% | 3% |
| Gross Profit | -1% | -7% | 10% | 10% |
| EBIT | -2% | -9% | 9% | 12% |
| EBITDA | -2% | -9% | 9% | 12% |
| Net income | -18% | 0% | 6% | 14% |
| Margins % | ||||
| Gross Margin | 50.4% | 45.8% | 44.5% | 47.5% |
| EBIT Margin | 38.5% | 34.1% | 32.8% | 35.8% |
| EBITDA Margin | 38.5% | 34.1% | 32.8% | 35.8% |
| Net Profit Margin | 34.8% | 34.0% | 31.8% | 35.2% |
| Return% | ||||
| ROE | 11% | 11% | 11% | 11% |
| ROA | 10% | 9% | 9% | 9% |
| Gearing % | ||||
| Net Debt/Equity | -61% | -55% | -51% | -48% |
| Liabilities/Equity | 16% | 10% | 7% | 5% |
| Segment Analysis | 2025 | 2026E | 2027E | 2028E |
| Revenue | ||||
| Apple | 33,634 | 34,874 | 41,866 | 42,689 |
| Others (Android) | 27,514 | 27,791 | 29,021 | 30,179 |
| Revenue YoY% | ||||
| Apple | 3% | 4% | 20% | 2% |
| Others (Android) | 3% | 1% | 4% | 4% |
| Revenue mix% | ||||
| Apple | 55% | 56% | 59% | 59% |
| Others (Android) | 45% | 44% | 41% | 41% |
| Valuation | 2025 | 2026E | 2027E | 2028E |
|---|---|---|---|---|
| Multiples | ||||
| P/E | 41.8 | 41.7 | 39.4 | 34.7 |
| P/B | 4.7 | 4.2 | 3.8 | 3.4 |
| P/S | 14.5 | 14.2 | 12.5 | 12.2 |
| EV/EBITDA | 32.9 | 36.2 | 33.3 | 29.7 |
| Yields | ||||
| FCF yield | 2.0% | 2.2% | 2.3% | 2.5% |
| Dividend yield | 1.2% | 1.2% | 1.3% | 1.5% |
| Efficiency | 2025 | 2026E | 2027E | 2028E |
| AR days | 63 | 62 | 59 | 50 |
| AP days | 23 | 22 | 22 | 26 |
| Inventory days | 67 | 75 | 90 | 117 |
| Cash conversion cycle | 106 | 116 | 127 | 141 |
Risk Reward - Largan Precision (3008.TW) Risk Reward - Largan Precision (3008.TW)
Higher OE estimates expand FAU opportunity; OW
NT$9,040.00 PRICE TARGET
Base case: Our price target is based on an SOTP valuation, comprising the traditional business and potential FAU opportunity. We value the traditional business using a residual income model, consistent with our Greater China Hardware Tech coverage, assuming an 8.5% cost of equity, an 8% net profit CAGR over 2026-36E and a 3% terminal growth rate. We separately value the FAU business, assuming a 40% market share in 2028.
NT$4,986.50
■
Mean
Consensus Price Target Distribution
NT$2,330.00
NT$9,040.00
Source: Refinitiv, Morgan Stanley Research
RISK REWARD CHART
Key: Historical Stock Performance Current Stock Price Price Target
Source: Refinitiv, Morgan Stanley Research
BULL CASE
BASE CASE
OVERWEIGHT THESIS
- ▪Largan should continue to benefit from iPhone camera upgrades, including variable aperture, foldable and periscope opportunities.
- ▪Our semi team's higher OE shipment assumptions materially expand the addressable FAU market, supporting a larger potential contribution from Largan's CPO/FAU business.
- ▪We see further upside if Largan successfully ramps mass production and gains meaningful FAU share, although coupling/matching yield and execution remain key risks.
Source: Refinitiv, Morgan Stanley Research
Risk Reward Themes
Pricing Power:
Positive
View descriptions of Risk Rewards Themes here
BEAR CASE
65x 2027e bull case EPS
Stronger-than-expected client demand and FAU development: We assume: 1) strongerthan-expected iPhone orders; 2) faster penetration of variable-aperture and periscope lenses; 3) faster-than-expected margin recovery; and 4) Largan ' s FAU market share reaches 45% in 2028.
52x 2027e base case EPS
iPhone upgrades support the traditional business, while FAU provides incremental upside: We assume: 1) Largan benefits from variable-aperture, foldable and periscope camera upgrades; and 2) Largan ' s FAU market share increases from 0% in 2026 to 5% in 2027 and 40% in 2028, supporting meaningful incremental earnings contribution from the FAU business.
NT$4,620.00
26x 2027e bear case EPS
Weaker client demand and slower FAU development: We assume: 1) weaker-thanexpected iPhone demand; 2) slower penetration of variable-aperture and periscope lenses; 3) weaker-than-expected margin recovery; and 4) delays in FAU mass production and slower market-share gains.
NT$11,426.00
MS PT
Morgan Stanley Estimates
NT$9,040.00
M Idea
Risk Reward - Largan Precision (3008.TW)
KEY EARNINGS INPUTS
| Drivers | Dec 2025 | Dec 2026eDec | 2027eDec | 2028e |
|---|---|---|---|---|
| Total smartphone shipment YoY (%) | 2.1 | (12.7) | 3.3 | 1.0 |
INVESTMENT DRIVERS
- New iPhone sell-through
- Monthly sales
- Upgrade trend for smartphone cameras
- FAU business development
GLOBAL REVENUE EXPOSURE
Source: Morgan Stanley Research Estimate View explanation of regional hierarchies here
MS ALPHA MODELS
3/5 MOST
3 Month
Horizon
Source: Refinitiv, FactSet, Morgan Stanley Research; 1 is the highest favored Quintile and 5 is the least favored Quintile
RISKS TO PT/RATING
RISKS TO UPSIDE
- Better-than-expected high-end smartphone demand
- Faster-than-expected penetration of periscopes
- Stronger-than-expected CPO volume growth
RISKS TO DOWNSIDE
- Greater-than-expected competition, which would erode Largan's ASP and gross margin
- Weaker-than-expected smartphone demand, especially for high-end models
- Market share gains and more pricing pressure from Sunny
- Weaker-than-expected CPO volume growth
OWNERSHIP POSITIONING
Inst. Owners, % Active
71%
Source: Refinitiv, Morgan Stanley Research
MS ESTIMATES VS. CONSENSUS
■
Source: Refinitiv, Morgan Stanley Research M Idea
Risk Reward Reference links
- View explanation of Options Probabilities methodology -
Options_Probabilities_Exhibit_Link.pdf
- View descriptions of Risk Rewards Themes - RR_Themes_Exhibit_Link.pdf
-
View explanation of regional hierarchies - GEG_Exhibit_Link.pdf
-
View explanation of Theme Exposure methodology -
ESG_Sustainable_Solutions_External_Link.pdf
- View explanation of HERS methodology - ESG_HERS_External_Link.pdf
M Idea
INDUSTRY COVERAGE: Greater Ch na Technology Hardware
| Company (Ticker) | Rating (As Of) | Price* (10/09/2026) |
|---|---|---|
| Andy Meng, CFA | ||
| AAC Technologies Holdings (2018.HK) | O (01/29/2024) | HK$3 .36 |
| Accelink Technologies Co. Ltd. (002281.SZ) | U (05/12/2022) | Rmb148. 1 |
| BYD Electronics (0285.HK) | O (04/28/2023) | HK$23.16 |
| China TransInfo Technology Co Ltd (0023 3.SZ) | E (0 /18/2023) | Rmb .40 |
| Dahua Technology Co. Ltd. (002236.SZ) | E (12/12/2024) | Rmb15.46 |
| Eoptolink Technology Inc Ltd (300502.SZ) | O (02/2 /2026) | Rmb3 0.20 |
| Genius Electronic Optical Co. Ltd. (3406.TW) | E (10/12/2026) | NT$1,060.00 |
| GoerTek Inc (002241.SZ) | E (08/14/2026) | Rmb21.51 |
| Gosuncn Technology Group Co Ltd (300098.SZ) | U (11/0 /2022) | Rmb4.20 |
| HIKVision Digital Technology (002415.SZ) | E (12/12/2024) | Rmb32.9 |
| Largan Precision (3008.TW) | O (10/12/2026) | NT$6,660.00 |
| LianChuang Electronic Technology Co Ltd (002036.SZ) | U (06/12/2024) | Rmb5.90 |
| Lingyi Itech Guangdong Co (002600.SZ) | U (04/23/2025) | Rmb11.15 |
| Lingyi Itech Guangdong Co (1688.HK) | O (08/14/2026) | HK$5.05 |
| Luxshare Precision Industry Co., Ltd. (24 5.HK) | O (08/14/2026) | HK$50.55 |
| Luxshare Precision Industry Co., Ltd. (0024 5.SZ) | O (10/24/2016) | Rmb4 .59 |
| OFILM Group Co Ltd (002456.SZ) | U (06/12/2024) | Rmb6.46 |
| Q Technology (Group) Company Ltd (14 8.HK) | U (03/23/2026) | HK$4.90 |
| Quectel Wireless Solutions Co Ltd (603236.SS) | E (10/09/2024) | Rmb 2.20 |
| Shanghai Conant Optical Co Ltd (22 6.HK) | O (04/10/2026) | HK$35.60 |
| Shenzhen Transsion Holdings Co Ltd (688036.SS) | E (03/23/2026) | Rmb48.95 |
| Sunny Optical (2382.HK) | E (03/23/2026) | HK$60.50 |
| Suzhou TFC Optical Communication Co Ltd. (300394.SZ) | E (11/06/2025) | Rmb235.04 |
| Wingtech Technology Co Ltd (600 45.SS) | U (05/18/2026) | Rmb15.64 HK$25.96 |
| Xiaomi Corp (1810.HK) | O (04/14/2021) | |
| Yangtze Optical Fibre and Cable JSC Ltd (601869.SS) | U (10/13/2021) | Rmb38 .8 |
| Yangtze Optical Fibre and Cable JSC Ltd (6869.HK) Yongxin Optics Co Ltd (60329 .SS) | O (0 /15/2026) | HK$168.30 |
| Zhejiang Crystal-Optech Co Ltd (0022 3.SZ) | E (11/15/2022) O (11/15/2022) | Rmb98.38 Rmb22.3 |
| Zhongji Innolight Co Ltd (300308.SZ) | O (09/0 /2026) | Rmb 5.29 |
| Zhongji Innolight Co Ltd (3308.HK) | O (09/0 /2026) | HK$9 4.50 |
| ZTE Corporation (0 63.HK) | O (06/04/2026) | HK$20. 6 |
| ZTE Corporation (000063.SZ) | E (06/04/2026) | Rmb29.03 |
| Derrick Yang | ||
| Accton Technology Corporation (2345.TW) | O (06/06/2024) | NT$2,0 0.00 |
| Advantech (2395.TW) | O (01/20/2021) | NT$ 2 .00 |
| AirTAC International (1590.TW) | O (04/16/2025) | NT$1,205.00 |
| Asia Vital Components Co. Ltd. (301 .TW) | O (0 /30/2024) | NT$3,440.00 |
| AU Optronics (2409.TW) | E (02/10/2026) | NT$36.60 |
| Auras Technology Co Ltd (3324.TWO) | E (05/04/2023) | NT$1,520.00 |
| Bizlink (3665.TW) | O (03/10/2025) | NT$2,360.00 |
| BOE Technology (000 25.SZ) | O (09/06/2019) | Rmb5.50 |
| Chenbro (8210.TW) | O (0 /23/2025) | NT$8 4.00 |
| Chroma Ate Inc. (2360.TW) | O (10/05/2021) | NT$2,330.00 |
| Delta Electronics Inc. (2308.TW) | O (0 /13/201 ) | NT$1,965.00 |
| E Ink Holdings Inc. (8069.TWO) | E (08/10/2026) | NT$144.00 |
| Ennostar Inc (3 14.TW) | U (09/23/2022) | NT$6 .00 |
| Fositek Corp (6805.TW) | O (06/25/2025) | NT$2,3 0.00 |
| Hiwin Technologies Corp. (2049.TW) | O (03/30/2026) | NT$332.50 |
| Innolux (3481.TW) | E (04/0 /2025) | NT$51.00 |
| King Slide Works Co. Ltd. (2059.TW) | O (11/08/2023) | NT$10,615.00 |
M Idea
| Lens Technology (300433.SZ) | E (0 /22/2020) | Rmb28.41 |
|---|---|---|
| Lite-On Technology (2301.TW) | E (01/15/2025) | NT$29 .50 |
| TCL Corp. (000100.SZ) | E (04/0 /2025) | Rmb4.64 |
| Tianma Microelectronics (000050.SZ) | U (01/24/2018) | Rmb6.23 |
| Wuhan Jingce Electronic Group Co Ltd (30056 .SZ) | E (11/26/2021) | Rmb168.22 |
| Howard Kao | ||
| Acer Inc. (2353.TW) | U (04/23/2025) | NT$31.30 |
| Asustek Computer Inc. (235 .TW) | U (11/16/2025) | NT$996.00 |
| Catcher Technology (24 4.TW) | U (11/1 /2025) | NT$195.50 |
| Compal Electronics (2324.TW) | U (04/23/2025) | NT$35.50 |
| Elite Material Co. (2383.TW) | O (09/14/2026) | NT$6,000.00 |
| FIT Hon Teng Ltd (6088.HK) | O (11/03/2025) | HK$4.63 |
| Foxconn Industrial Internet Co. Ltd. (601138.SS) | O (0 /10/2019) | Rmb56.0 |
| Giga-Byte Technology Co. Ltd. (23 6.TW) | E (11/16/2025) | NT$363.00 |
| Gold Circuit Electronics Ltd. (2368.TW) | O (10/06/2022) | NT$1,285.00 |
| Hon Hai Precision (231 .TW) | O (03/15/2024) | NT$249.00 |
| Inspur Electronic Information (0009 .SZ) | E (08/28/2023) | Rmb64.69 |
| Kingboard Laminates Holdings Ltd. (1888.HK) | O (09/14/2026) | HK$49.00 |
| LandMark Optoelectronics Corporation (3081.TWO) | E (03/26/2026) | NT$2,960.00 |
| Lenovo (0992.HK) | O (0 /10/2026) | HK$32.84 |
| Lotes Co. Ltd. (3533.TW) | E (05/12/2025) | NT$1,915.00 |
| Nan Ya PCB (8046.TW) | O (02/23/2026) | NT$1,4 5.00 |
| Pegatron Corporation (4938.TW) | E (03/25/2026) | NT$89. 0 |
| Quanta Computer Inc. (2382.TW) | O (05/01/2023) | NT$325.50 |
| Shengyi Technology Co Ltd. (600183.SS) | E (05/26/2022) | Rmb124.14 |
| Shennan Circuits Co Ltd (002916.SZ) | E (08/24/2023) | Rmb34 .25 |
| Unimicron (303 .TW) | O (02/23/2026) | NT$1,2 0.00 |
| Visual Photonics Epitaxy Co Ltd (2455.TW) | E (09/11/2023) | NT$558.00 |
| Wistron Corporation (3231.TW) | O (0 /12/2023) | NT$188.50 |
| Wiwynn Corp (6669.TW) | O (11/10/2025) | NT$2,240.00 |
| Yageo Corp. (232 .TW) | O (10/28/2025) | NT$635.00 |
| Zhen Ding (4958.TW) | ++ | NT$592.00 |
| Irene Yen | ||
| Co-Tech Development Corp. (8358.TWO) | O (09/14/2026) | NT$535.00 |
| Taiwan Union Technology Corporation (62 4.TWO) | O (09/14/2026) | NT$1, 40.00 |
Stock Ratings ar subj ct to chang . Pl as s lat st r s arch for ach company.
- Historical pric s ar not split adjust d.