Largan’s FVE Trimmed to TWD 2,600 As Dull Smartphone Market Continues; 2023 Recovery Is Intact

We trim our fair value estimate for Largan Precision to TWD 2,600 per share as 2022’s first-quarter results were lackluster due to challenging smartphone environments. Mobile phone players, including Largan, suffered from more significant delays in shipments and upgrades as tepid demand continued. While the tough environment should continue throughout 2022, we expect the company to experience meaningful recovery beginning in 2023, which is the reason to believe Largan's shares are undervalued. Management is cautiously optimistic about smartphones as it ramps up investment in its Dongguan facility to be operational in mid-2023.