Shares of Largan Precision Co (大立光) yesterday surged by the 10 percent daily limit to this year’s highest price of NT$3,430, after posting a record-high gross margin for last quarter and offering a rosy outlook for this quarter.
Largan is a camera lens supplier for smartphones and tablets. Its main clients include US-based Apple Inc, China-based Huawei Technologies Co (華為) and Taiwan-based Asustek Computer Inc (華碩).
Although the company’s net income for last quarter dropped 23.44 percent annually to NT$3.69 billion (US$115.35 million), its gross margin of 66.4 percent last quarter was the highest in the company’s history, according to the latest financial results.
Largan chief executive officer Adam Lin (林恩平) on Thursday told investors the company’s revenue would continue growing this month and next month on the back of increasing orders from clients.
The company’s stock price steamed ahead soon after the market opened yesterday morning and reached NT$3,430, or an increase of NT$310 per share from a day earlier.
A total of 2.02 million Largan shares were traded yesterday on the Taiwan Stock Exchange, with buy orders of 370,000 shares waiting to be executed in the next session.
The strong stock performance reflected investors’ confidence in Largan, and the recent weakening US dollar also lent support to drive foreign investors’ money into Taiwan’s stock market, dealers said.
Yuanta Securities Investment Consulting Co (元大投顧) said in a note that Largan’s share price would be boosted by its record-high gross margin for last quarter.
Yuanta analyst Jeff Pu (蒲得宇) said Largan’s order allocation in Apple’s upcoming iPhones would be higher than market expectations, as Largan’s production yield is far better than that of its competitors, which would also help Largan increase its average selling price for the new models.
Largan’s revenue is likely to jump by 37 percent quarterly to NT$13.71 billion this quarter, Pu said.
Similarly, Daiwa Capital Markets said Largan’s revenue would expand by as much as 40 percent quarterly to NT$14.02 billion this quarter, fueled by the increasing production of high-end camera lenses for new iPhones.
Daiwa analyst Kylie Huang (黃奎毓) said in a separate note that Largan is expected to enjoy a 10 percent to 15 percent increase in average selling prices this quarter, thanks to specification upgrades for new iPhones.
So far this year, Largan shares have climbed 37.44 percent. The stock hit its highest-ever level of NT$3,715 on July 1 last year, Taiwan Stock Exchange data showed.
Led by Largan, other companies in the Apple supply chain yesterday also witnessed strong gains on the local bourse, including metal casing maker Catcher Technology Co (可成), as well as handset assemblers Pagetron Corp (和碩) and Hon Hai Precision Industry Co (鴻海).
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