A US-based brokerage has raised its target price for shares of Taiwanese smartphone camera lens supplier Largan Precision Co (大立光) to NT$5,700, the highest among foreign brokerages that follow the firm.
In a research note, the brokerage said that Largan, one of the most important suppliers to Apple Inc, is expected to benefit from the anticipated launch of next-generation iPhones later this year, with the US consumer electronics giant expected to include significant upgrades.
Many market analysts believe Apple plans to adopt dual camera lenses for all its new iPhones, which would boost Largan’s shipments.
Apple has equipped the larger iPhone 7 Plus, the latest model, with a dual lens camera, but the smaller iPhone 7 only has a single lens camera.
The US brokerage, which has raised its target price on Largan shares from NT$5,000 to NT$5,700, said that the company accounts for almost 100 percent of dual lens supply to Apple on the back of its lead in research and development.
On Friday, the last trading day before the four-day 228 Memorial Day holiday, Largan shares closed at NT$4,560 on the Taiwan Stock Exchange.
Since the beginning of this year, the shares have gained more than 20 percent on the back of foreign institutional buying amid optimism over the company’s bottom line.
The Central News Agency cannot identify the brokerage because Taiwanese media outlets are not allowed to report the name of a foreign brokerage when it gives price forecasts for specific stocks.
In addition to being upbeat about upcoming iPhone sales, the US brokerage said that Largan is expected to secure more orders from Chinese smartphone brands, which are increasingly adopting dual lens cameras.
The brokerage said that several Chinese smartphone vendors, such as Mobile Telecommunications Corp (歐珀) and Huawei Technologies Inc (華為), are expected to unveil new flagship models equipped with dual lenses at the Mobile World Congress in Barcelona, which started yesterday, and Largan is one of their major suppliers.
The brokerage said that Largan accounted for more than 80 percent of dual lens orders placed by Chinese smartphone vendors and it would be hard for any of its rivals to catch up in the Chinese market.
Meanwhile, Samsung Electronics Co is also expected to increase its lens orders from Largan when the South Korean smartphone maker adopts dual lenses for its new handsets due to be launched in the second half of this year, the brokerage said.
Due to an upbeat outlook for Largan, the brokerage has maintained an “outperform” recommendation on the stock.
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