Largan Precision Co (大立光) yesterday said its second-quarter net profit grew 10.32 percent quarter-on-quarter and 206 percent year-on-year due to increased shipments of camera lenses for clients’ new high-end smartphones.
While the smartphone market is at saturation, the nation’s leading handset camera lens maker gave an investors conference a positive outlook and said momentum would be sustained this quarter with customers’ new products scheduled to be launched later this year.
Largan generated a net profit of NT$2.03 billion (US$67.88 million) last quarter, or earnings per share of NT$15.17. The figure beat the averaged forecast of brokerages of NT$1.33 billion.
The Taichung-based company generated gross profit of NT$2.95 billion last quarter, with gross margin of 50.4 percent, beating a market consensus of 33.8 percent.
For the first half of the year, Largan posted a 150 percent growth in net profit, or NT$28.96 a share, compared with NT$11.56 during the same period of last year.
“With customers [including Apple Inc] planning to roll out new high-end smartphone products later this year, Largan’s sales performance and profitability might achieve sequential growth this quarter,” chief executive Adam Lin (林恩平) told the conference.
Largan has begun shipping camera lenses to the world’s largest smartphone maker, Samsung Electronics Co, which placed orders earlier this year, Lin said.
“Based on speed of volume of orders the company has received, no significant change to clients’ demand was found, implying that Largan’s clients’ sales condition remains stable and that Largan, as a smartphone component supplier, can be optimistic about its sales prospects during the second half of the year,” he said.
With smartphone vendors facing challenges because of the market’s saturation, Lin said Largan needs to maintain its flexibility so it can respond to clients’ order adjustments.
The company is not coming under pressure for clients to control costs, but it needs to continue improving yield rate to meet clients’ demand for advanced camera lenses that can take higher quality pictures, he said.
Camera lenses capable of taking pictures in more than 8 megapixels have been widely used for mid-end smartphones, while most new entry-level smartphones are equipped with 5-megapixel lenses, Lin said.
The company said 8-megapixel lenses accounted for between 30 percent and 40 percent of its total shipments during the first half of the year, while 5-megapixel lenses accounted for between 20 percent and 30 percent, and 1-megapixel ones accounted for between 10 percent and 20 percent.
“There are more smartphone vendors demanding more than 10-megapixel lenses and some wanting less than 8-megapixel lenses for their high-end smartphone products, creating challenges for handset camera lens makers, including Largan, to compete,” Lin said.
Largan’s shares closed up 5.06 percent at NT$935 in trading yesterday, outperforming the broader market, which fell 0.4 percent.
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