In his latest survey, the TF International Securities tech analyst, Ming-Chi Kuo pointed out that AOET will soon be the new lens supplier for the iPad, and its partnership with Largan and camera module (CCM) shipment will drive growth in the medium to long term.
Ming-Chi Kuo stated that AOET’s Advanced Optical, which is the largest lens supplier for Mac will start shipping lenses for iPad 4P in the second quarter of 2023. However, aside from the iPad orders, he further added that there are three important growth trends worthy of attention for Advanced Optical in the future.
Advanced Optical Benefits
According to him, Advanced Optical will accumulate economic through the iPad orders, as well as boost revenue and profits. Ming-Chi Kuo premises the three benefits of Advanced Optical as follows:
1. Benefiting from new iPad orders, Advanced Optical’s revenue and profit in 2H23 are expected to grow YoY amid the economic recession. Looking into the mid-to-long term, Advanced Optical may follow Sunny Optical’s growth model in Apple’s lens supply chain. That is to say, get iPad orders → increase the supply ratio of iPad orders → get iPhone orders
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2. Largan shares design and manufacturing experience with Advanced Optical, which is one of the keys for Advanced Optical to become a new lens supplier for the iPad. This cooperation model may be replicated again and again in the future. For Largan (the largest shareholder of Advanced Optical), it is a win-win strategy for both parties to assist Advanced Optical in making lens orders with relatively low gross profit margins. In addition, Advanced Light can also use Largen’s patents to sue competitors and protect orders in the future.
3. Reached strategic cooperation with key American laptop brand customers. To help the customer gradually reduce the supply ratio of Chinese suppliers from 2024 to 2026, Advanced Optical is expected to start shipping CCMs as soon as 2024. This vertical integration is beneficial to Advanced Optical’s long-term profitability and will be a new growth driver in the future.