Lin Enping, chairman of Largan (3008), a leading optical lens manufacturer, said at a press conference today that the FA (fiber array) product has been certified. Customers will confirm their production capacity construction needs with Largan this month. It is expected to complete the production capacity construction by the end of the second quarter of next year and start mass production and contribute revenue. Looking forward to the fourth quarter, Lin Enping pointed out that the momentum of purchasing goods will remain flat in September and October, but will decline in November. The gross profit margin in the fourth quarter is suppressed by green power procurement, but the yield rate has gradually improved.
Regarding the development of the CPO (co-packaged optics) field, Lin Enping explained that Largan currently plans to make its own FA, outsource PMLA (microlens array), and then form a FAU (fiber array unit) through coupling. Among them, FA has been certified by a customer, and FAU will discuss sample delivery with customers this month. Both products will be mass-produced in 2027.
In addition, Lin Enping also pointed out that multi-row FA is currently in the sample delivery stage and will be mass-produced as soon as 2028. He is optimistic that the vast majority of next-generation projects will be multi-row FA. In addition to the one customer who has passed the certification, there are many other potential customers who are developing next-generation products, and the schedule is mainly scheduled for 2028.
Largan has been actively hunting for land to expand its factories this year. In the third quarter, capital expenditure was 8.18 billion yuan, most of which included land purchase fees. Lin Enping said that a newly completed factory in the middle of next year will be fully used for FAU mass production, while the newly purchased factory is expected to be completed in 2030 and will be fully used in the fields of optical communications and FAU to meet customer needs.
In the field of mobile phones, Lin Enping said that customers have lowered their demand in September and sales this year should not be satisfactory. Currently, the momentum of purchasing goods in September and October is flat. In November, the peak of customer purchasing has passed, and the momentum will decline. Some products that customers will release next year will be shipped from October, but it will not be able to make up for the downward revision of customers in September. As for the progress of product upgrades, the main lens will be upgraded in 2027, and the periscope lens may also be upgraded in 2028.
Largan's third-quarter revenue was 15.651 billion yuan, with a gross profit margin of 42.2%, a quarterly decrease of 7.2 percentage points and an annual decrease of 5 percentage points. After-tax net profit was 5.18 billion yuan, a quarterly increase of 11% and an annual decrease of 27.6%. Earnings per share (EP S) 39.62 yuan; the cumulative revenue in the first three quarters was 44.86 billion yuan, with a gross profit margin of 46.9%, an annual decrease of 4.5 percentage points, an after-tax net profit of 15.976 billion yuan, an annual increase of 8.2%, and earnings per share of 121.98 yuan.
Regarding the outlook for gross profit margin in the fourth quarter, Lin Enping said that because contracts with customers require the purchase of green power and the purchase of green power is based on the proportion of customers, it will have a negative impact on gross profit margin performance and has become a structural problem. The price for 2027 has been negotiated, and it will take until 2028 to reflect the cost of green power through quotations.
