水晶光电（A）：四季度业绩超预期；苹果业务扩张支撑短期，AR/AI服务器成新驱动；买入

4Q beat;expansion at Apple tosupportnear-term, AR/AI server new drivers; Buy Reiterate Rating:BUY| PO:32.00 CNY| Price:29.04 CNY 20 April 2026 4Q beat on better opex control Crystal-Optech’s 4Q earnings beat BofAe/consensus by 8%/13% at CNY189mn (-61%QoQ, +12% YoY) on better opex control. Revenue of CNY1.8bn (-14% QoQ, +15% YoY)was largely in line with BofAe while 5% below consensus. OPM was 1.5ppt/4.7ppt higherthan BofAe/consensus at 13.5% (-9.3ppt QoQ, +5.0ppt YoY). Equity Apple a near-term driver: IRCF, variable aperture Despite the pressure from weakening Android smartphonepull-in, we expect Crystal’sdelivery at Apple to help offset the negatives. We expect potentially faster share gain atIRCF given firm’s more attractive pricing. Meanwhile, mgmt. highlighted it will be thesole supplier of iPhone variable aperture’s optical parts, supporting sales into 2H26. AR production line set; eyes on optics for AI server Mgmt. highlighted that its firstwaveguide production line for AR glasses have finishedconstruction. We view Meta’s new smart glasses launch 2H26-2027 could potentiallybring upside. More importantly, Crystal is tapping into AI server related optics, byleveraging its years’know-how in semi optics. Mgmt. highlighted they are capable tosupply narrow bandpass filter and micro lens, and is working on CPO/HDD relatedprojects, which should see meaningful progress in coming two years. Katherine Zhu>>Research AnalystMerrill Lynch (Hong Kong)kexin.zhu@bofa.com Robert Cheng>>Research AnalystMerrill Lynch (Taiwan)robert.cheng@bofa.com Lift PO to CNY32, reiterate Buy Doris Kao>>Research AnalystMerrill Lynch (Taiwan)doris.kao@bofa.com Wecut 2026-27E earnings by 5-6% to reflect the impact from Android biz, whileintroducing 2028E. However, we lift our PO to CNY32 (30x 2026E P/E, 27x prior) fromCNY30 as we apply a higher P/E to reflect market’s positive view on AI server relatedbiz. We see Crystal has proved a good track record by delivering steady earnings CAGReven in downcycles. Looking ahead, we expect its multi-year projects at Apple and solidknow-how at AR/semi optics to support a long-term growth. Reiterate Buy. Cindy Lo>>Research AnalystMerrill Lynch (Taiwan)cindy.lo3@bofa.com This research report provides general information only. No part of this report may be usedor reproduced or quoted in any manner whatsoever in Taiwan by the press or otherpersons without the express writtenconsent of BofA Securities.>> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analyst under the FINRA rules.Refer to "Other Important Disclosures" for information on certain BofA Securities entities that take responsibility for the information herein in particular jurisdictions.BofA Securities does and seeks to do business with issuers covered in its research AcronymIRCF:infrared cut-off filterAR:augmented realityCPO: co-packaged opticsHDD:hard drive disk reports. As a result, investors should be aware that the firm may have a conflict ofinterest that couldaffect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision.Refer to important disclosures on page 8 to 10. Analyst Certification on page 5. PriceObjective Basis/Risk on page 5.12960558 iQprofileSMCrystal-Optech (A) Company SectorIT Hardware CompanyDescription Crystal Optech, founded in 2002, is a key upstream opticsupplier focusing on IRCF, optic cover glass, prism andbiometric sensing components. Apple is its largestsmartphone customer, followed by Android brands andmodule makers. Crystal alsosupplies waveguide lenses forAR glasses. The company entered the auto market in 2021and focuses on LiDAR cover and AR-HUD. Crystal is alsoactively expanding into AI server related areas. Investment Rationale We have a Buy rating on Crystal Optech, on(1) multi-yearcontent value/share gain at iPhone cameras, and (2) rapidexpansion in auto with delivery in HUD and LiDAR cover. ARand AI server related optics may bring more upside incoming years. Stock Data Price to Book Value3.6x Price objective basis & risk Crystal-Optech (XMKAF) We set our PO at CNY32, on 30x 2026E P/E. 30x is 0.5SD above Crystal's historicaltrading average of 27x. We view 30x as supported by Crystal's solid earnings expansionof 21% CAGR in 2025-28E, as well as its strong position in Apple/AR glasses supplychain and expansion into AI server related optics. Downside risks: (1) slower-than-expected penetration at periscope and 3D sensing lens,(2) worse-than-expected demand at consumer electronics, (3) slower-than-expectedHUD/LiDAR penetration at auto, and (4) intensified competition. Upside risks: (1) faster-than-expected penetration at periscope and 3D sensing lens, (2)better-than-expected demand at consumer electronics, (3) faster-than-expectedHUD/LiDAR penetration at auto, and (4) easing competition. Analyst Certification I, Katherine Zhu, hereby certify that the views expressed i