Abstract
This study adopts case study method and enterprise evaluation method for optical lens industry leader Largan Precision Co., Ltd. and Genius Electronic Optical Co., Ltd. to analyze operating strategies and business valuation, also to gain further insight into the industry status, product technology and competitiveness of the Taiwan's optical lens manufacturers. The enterprise evaluation methods are Sales Driven DCF Method and Earning Driven DCF Method to evaluate the reasonable value and the shares that may be implied sales growth rate and earnings growth rate to affect the value of an enterprise. In addition, we conduct sensitivity analysis to figures out the value driving factors. The results of empirical evidence presents that key value driving factor of Largan is the growth of earnings (ROIC included). In addition, the sales growth rate also has considerable influence, and strategic analysis of this study is consistent with the conclusion. I suggest that Largan can protect the core technology and talent, increase a variety of production capacity, and do not focus on the price competitions, cost effectiveness of the highly automated and flexibility production process which should be strengthening the existing competitiveness. The key driving factor of Genius is also earnings growth rate; the indicator’s impact of sensitivity analysis is bigger than Largan. As long as the negative excess return, my suggestion is that Genius can focus on internal careers by product, customer and region to determine the high margin business group to increase investment, and non-profit sectors to estimate the need to invest. If not improve the long-term negative returns, Genius should apply an internal restructuring or external improvements, and against funding gap may do the financial innovations to reduce the cost of capital, all of these can helps to reduce operational risks of Genius.