Largan Precision Earnings Call: Lin En-Ping States July Business Momentum Improved, Major Customers Remain Highly Committed to Lens Upgrades

Largan Precision (3008-TW) held an online corporate briefing today (9th) and announced a post-tax net profit of NT$10.793 billion for the first half of 2026, representing a year-on-year increase of 44.38%. The company's earnings per share (EPS) for the first half reached NT$82.35. Regarding business outlook, CEO Lin En-Ping stated that July's operational momentum was slightly better than June's, and the outlook for August is even more positive, with production capacity expected to remain fully loaded. He emphasized that major customers still have strong ambitions for continuous product upgrades.

On smartphone lens operations, Lin En-Ping noted that major customers are actively pursuing lens upgrades. Variable aperture lenses have entered mass production in the second quarter, although initial shipments are limited and yield rates are not yet optimal. Therefore, the improvement in assembly yield during the third quarter will be a critical factor affecting gross margin performance.

Largan Precision's revenue for Q2 2026 reached NT$13.665 billion, with a gross margin of 49.41%, stable compared to Q1 but down 4.22 percentage points year-on-year. Post-tax net profit was NT$4.67 billion, down 35.92% quarter-on-quarter but up 3.52 times year-on-year, with a quarterly EPS of NT$35.72. The market expects shipments of next-generation smartphone lens models to begin in Q3, which could further boost gross margins.

However, Lin En-Ping pointed out that manufacturing variable aperture lenses is more challenging than periscope lenses, primarily due to stricter requirements for dust and foreign particle control.

Rising memory and raw material costs have forced major U.S. brands to increase prices for 3C electronics, potentially leading to downward revisions in overall sales volume. Lin stated that while major customers have not revised down their lens order forecasts for new models this year, adjustments may occur dynamically if market launches underperform.

Lin emphasized that unlike other regional customers who have adopted a more passive stance on lens upgrades amid current market headwinds, major customers remain highly ambitious. Upgrade projects are ongoing for both main and periscope lenses, including higher resolution and increased lens element counts. These enhanced lenses could be seen in smartphones as early as 2027.

Largan's stock opened at NT$4,025 this morning, reached a high of NT$4,140, a low of NT$3,950, and closed flat at NT$3,950. Total trading volume was 1,512 shares. Foreign investors sold a net 485 shares, while investment trusts bought 23 shares and proprietary traders bought 13 shares.