Taiwanese handset lens maker Largan Precision Co’s (大立光) strong earnings outlook next year continues to make it one of Citigroup’s favored plays in the handset supply chain, the US brokerage said in a note yesterday.
Citigroup forecast Largan’s net income would surge 32.9 percent to NT$5.58 billion next year, driven mainly by rising adoption of 8-megapixel (MP) lenses by major handset brands and steady growth for 5MP lenses used in 3D cameras and tablet PCs.
“Based on the normal camera migration schedule, the second half of this year should be a period when 5MP handsets become features of middle-to-high-end handsets, with very low 8MP penetration,” Citigroup analyst Kevin Chang (張凱偉) wrote.
“However, we are seeing higher-than-expected 5MP penetration not only in mid-to-high end models but lots of mainstream or even mid-to-low-end models,” Chang said.
Moreover, signs that many handset brands have started using 8MP lenses in their flagship models — such as HTC Corp’s EVO, Incredible, Desire HD and Mozart, Motorola Inc’s Droid X and Milestone XT720, as well as Nokia Oyj’s C7 and E7 — indicate stronger-than-expected demand for 8MP models, Chang said.
“In consumer products, there’s no turning back on hardware specification evolution so we believe that 8MP adoption will continue to rise in 2011,” Chang said.
Citigroup said the anticipated mass production of Largan’s in-house voice coil motors (VCM) next year was another factor that could help enhance its profitability.
Largan chairman Tony Chen (陳世卿) told investors in August that the company was ramping up in-house production of VCMs and expected yields to improve as mass production takes off next year.
The brokerage maintained its “buy” rating on Largan, with a 12-month target price of NT$749, implying an upside of 36.4 percent from the stock’s closing price of NT$549 yesterday in Taipei trading.
So far this year, Largan has risen 30.4 percent, outpacing the TAIEX’s 0.33 percent advance, Taiwan Stock Exchange data showed.
On Wednesday, however, Bank of America Merrill Lynch slashed its target price for Largan to NT$595 from NT$700, saying that the company’s earnings and revenue would be negatively impacted next year given that the latest handset models running on Microsoft Corp’s new Windows Phone 7 (WP7) operating system unveiled on Monday would not be using 8-megapixel lenses.
Largan is scheduled to hold an investor conference and release third-quarter results on Thursday next week.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last