Thu, Jan 25, 2007 - Page 12 News List

Largan Precision sees sales rocket for a record high


Largan Precision Co (大立光), the nation's leading maker of camera lenses, saw its sales rise 82 percent last year from the previous year, fueled by strong worldwide shipments of camera handsets.

The Taichung-based maker posted a record high of NT$7.3 billion (US$222.7 million) in sales last year, up from NT$4 billion, it told an investor conference yesterday.

Net income was NT$3.9 billion last year, or NT$32.06 per share, showing a 127 percent growth from NT$1.7 billion, or NT$14.1 a share, a year ago.

Gross margins, meanwhile, improved to 61.9 percent from 53.7 percent, according to company statistics.

In terms of fourth quarter results, Largan posted NT$2.1 billion in sales, with gross margins hitting a record high of 62.6 percent.

However, the company is expected to brace for a traditionally slow first quarter, where it may see a double-digit decline in sequential sales.

"Clients' demand will slow this quarter due to inventories having piled up last year," said company chairman and chief executive Scott Lin (林耀英).

Continuous price pressure will also affect the margin performance, he said.

This year, focus will be on 2-megapixel (MP) lenses and lower-resolution video-graphics-array (VGA) lenses, as 1.3-MP lenses lose momentum, he said.

"Handset buyers will normally go for VGA lenses just to snap simple pictures or choose higher-end 2-MP models for better quality. The 1.3-MP lenses are stuck in an awkward position," said Marty Kung (龔俊光), an analyst with Market Intelligence Center (市場情報中心).

He said that more production of 2-MP lenses will increase profitability for Largan, but the price advantage may not last long due to stiff industry competition.

According to Lin, Largan is poised to speed up its pace in other product portfolios in a bid to diversify risks on handsets.

In the fourth quarter of last year, lens shipments from handsets contributed 87 percent to the company's total sales.

Shipments of digital cameras and multi-functional printers accounted for 7 percent and 4 percent respectively.

New products this year include lenses for notebooks and MP3 players, Lin said, adding that MP3 lenses will start being produced next month, with volumes picking up in June.

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