Investment Bank Research Brief
The core of the report is that the mass production progress of its CPO (co-packaged optics) fiber array (FA) business is better than expected.
The core of the report is that the mass production progress of its CPO (co-packaged optics) fiber array (FA) business is better than expected. The company has received a product order from a customer for single-line FA, and plans to start trial production in 2026, with mass production possible as early as mid-2027. At the same time, iPhone camera specification upgrades in 2027-28 will be more intensive than expected. Technically, 2Q26 results showed gross profit margin was slightly lower than expected, but this was overshadowed by the positive progress of CPO. Largan is transforming from a mobile phone lens company into a core supplier of optical components for AI data centers. The market’s previous valuation system for its CPO business has not yet been fully established, which means there is huge room for revaluation. One sentence conclusion: Largan's value goes far beyond mobile phone lenses. The leading position of CPO-FA technology and mass production progress will drive the reconstruction of the company's valuation system. Positive/negative: Positive for Largan Guang (3008.TW). The market has just begun to recognize the potential of the CPO business, and is currently far from pricing in the huge revenue and profit increases it may bring in the future. Catalysts: 1) The trial production results and mass production schedule of CPO-FA products for customers will be further clarified in the second half of the year; 2) Details of the iPhone lens specification upgrade in 2027-28; 3) Whether any new CPO customers will be disclosed.