苹果供应链中COB的潜在采用：不止一个受益者

China (PRC) I Technology Potential Adoption of COB in Apple SupplyChain: Not Only One Beneficiary camera module onits upcoming wearableproducts (TWS/Al glasses)andthenoniPhoneperiscope/ultrawidecamerain2028,thankstoitscontinued evolution in miniaturization. While such a trend does bring moreopportunities for Sunny to enter its module supply chain, we do not think itwouldbeathreattoCowellbyleadinginCoB/FCtechniques,andthusbothcouldbebeneficiaries,inourview driven by market chatter on its potential in supplying camera module with CoB (chip on board)assembly solution to Apple and breakthrough in Al optics.Based on our earlier channel checks,Apple is indeedplanning to adopt COB on multiple types of products tograduallyreplace theoriginal Fc (flip chip) assembly,thanks to the continued evolution of the former in achievingminiaturization over the past years. Specifically, Apple could first introduce it on its upcomingwearable products, such as TwS and Al glasses equipped with cameras as an early adoptionfor supply chain's ramp and then may adopt it on iPhone's both periscope/ultrawide camerasthat Apple is trying to embrace new assembly techniques going forward after sticking to FCsolutions on most products for decades. Implicationsto Sunny:Sunnyhaslong been making progress on the miniaturization of cameramodules (e.g., leading in MOB/MOC solutions). We believe Apple's adoption of COB does bringmore opportunitiesfor Sunnytoenteritscameramodule supplychain in thefuture,potentiallycreating a TAM no smaller than the Android camp as a whole for this business. In addition,Sunny is continuously improving its product structure in the Android market. We estimateSunnyhad 10%/20%mixof hybrid/periscope lens,respectively,in total smartphone lensrevand ~20% mix of periscope module in smartphone module rev in2025,and mgmt previouslyguided to decent rev growth for those high-end products in 2026, implying further productmix optimization, making it relatively resilient on smartphone market headwinds this year.For Al optics, while it may take time for product R&D and customer qualification, we thinkSunny could leverage its existingtechnigues on various components (prism,MLA,FAU,andalso supportfaster integration into potential key clients'supply chains through M&A or equityinvestment in the future, if mgmt decides to make Al optics a key development roadmap goingforward. Implications to Cowell: We already pointed out another potential big upgrade on iPhone'scamera in 2028 (Link).While some investors may worry about the threat from Sunny's potentialentrance, we believe that by leading in both COB/FC techniques, Cowell could continue toFrom that perspective, Sunny is more likely to gain market share from other existing vendors,in our view. Thus, our view on Cowell to achieve strong NP growth CAGR over the next fewyears through ongoing market share gain and AsP hike remains intact. While some investorsare concerned about Cowell as merely a pure consumer electronics play, we think it also hassome potential in Al optics (e.g., providing Micro LED along with Luxshare as a CPO solution),creating the possibility of re-rate in the future. JackyHe* Equity Analyst+85237438084ljacky.he@jefferies.com EdisonLee,CFA*|EquityAnalyst85237438009ledison.lee@jefferies.com NickCheng*EquityAnalyst+852374387501nick.cheng@jefferies.com MattMa*|EquityAnalyst85237671109|matt.ma@jefferies.com Annie Ping, CFA,FRM*Equity Associate+85237671273lannie.ping@jefferies.com Jefferies Apple Inc. Our 12-month forward PT is based on DCF to FY31E using a WACC of 7.8% and a terminal growth rate of 4.5% (implying 30.2x FY31E PE).Our PT implies 40.0x FY26E PE and 3.4x FY26E PEG. Key upside risks: 1) strong reception to Apple Intelligence in 2026, leading to stronger demandfor iPhone 18, 2) stronger-than-expected demand for 18 Fold, and 3) memory prices peaking in 3Q26 and starting to fall thereafter. Key downsideApple such as the foldable iPhone and all-glass models, and 3) return of tariff risks driven by a lack of eventual trade deal between China andthe US and India and the US. Our price target of HKS45.00 is based on end-2026E DCF, with a WACC of 10.6% and 4.0% terminal growth (2030E). Key risks include 1) worse- than-expected iPhone/iPad shipments; 2) slower-than-expected market share gain in iPhone rear-camera module; 3) camera specs ceasing tobe a major upgrade area; 4) market share loss to peers or new suppliers on existing products; and 5) slower-than-expected proliferation of AppleMR products. Our price target of HKS63.00 is based on end-2026E DCF, with a WACC of 13.2% and 1.0% terminal growth (2030E). Key risks include: 1) Slower- than-expected smartphone demand recovery;2) ASP/GM deterioration on smartphone camera lens/module; 3) Slower-than-expected EV or ADASpenetration; and 4) Slower-than-expected XR demand growth. AnalystCertification:I, Jacky He, certify that all of the views expressed in this research report accurately reflect my personal