1、China(PRC)|Electronic ComponentsEquity ResearchJuly 8,2025 JackyHe*|Equity Analyst+852 3743 8084|EdisonLee,CFA*|Equity Analyst852 3743 8009|NickCheng*|Equity Analyst+852 3743 8750|MattMa*|Equity Analyst852 3767 1109|Optical Components a Hidden Gem;Initiate onCrystal/Lante with BUYWe are bullish on t

2、he upgrade potential for high-end smartphone optics(e.g.iPhone camera content value up 50%in 2020-24).Ongoing opticsinnovation creates structural growth opportunities.AR is the X factor withlarge LT growth potential for optical components(30-50%of BOM cost)but still in its infancy.Another positive i

3、s rising ADAS penetration,whichdrives auto camera/LiDAR demand.Initiate on Crystal/Lante with BUY;prefer Crystal with 38%upside.Upgrade on smartphone optics to continue.Since camera features are key considerationswhen consumers buy a smartphone(especially for high-end models),OEMs have continuedupgr

4、ading optical components to achieve differentiation.For Apple,as the top premium brand(50%global smartphone revenue share),iPhone shipment volume only increased 10%in2020-24,but its camera TAM has expanded by 50%in value,driven by spec upgrade and morecomplex design.Our industry checks suggest Apple

5、 will adopt more innovations in opticalsolutions in the next 4-5 years,such as spec fine-tuning(larger sensor,more hybrid lens/OIS,etc.),variable aperture and expansion in focal length range by enhancing optical zoomcapabilities.Although some solutions may still be at an early stage,we are confident

6、 in Applesdetermination to push for ongoing upgrades.Hence,related suppliers could be the mainbeneficiaries of this trend,even though overall smartphone volume growth may be limited.ADAS another solid growth driver,while AR the long-term X factor.We see auto as a highlylikely growth area for optical