Shares in Largan Precision Co (大立光), a supplier of smartphone camera lenses to Apple Inc, yesterday slipped below NT$4,000 for the first time in about one year on concerns over shipments of the iPhone X, dealers said.
The stock hit a low of NT$3,945 in the first 10 minutes of trading — its lowest point in intraday trading since Jan. 10 with a low of NT$3,990 — but recovered to end unchanged at NT$4,000, outperforming the TAIEX, which closed 0.96 percent lower at 10,421.91.
Largan stock has been up and down this year. The stock ended last year at NT$3,790, then soared to an intraday high of NT$6,075 on Aug. 25, before plummeting nearly 35 percent since then and giving away most of its gains for the year.
Whether Largan shares can stage a meaningful rebound depends on whether foreign institutional investors buy Largan shares they previously sold short after they return to the trading floor following the Christmas and New Year holidays, dealers said.
“Many foreign institutional investors have been away from the local market for the year-end holidays. I think local institutional investors acted as the major force pushing down Largan shares today,” MasterLink Securities (元富證券) analyst Tom Tang (湯忠謙) said.
“Local investment trust firms seized on iPhone X shipment concerns as a reason to cut their holdings in liquid Largan shares,” Tang said.
Local media has been speculating that due to weaker-than-expected demand for the iPhone X, the signature model for the 10th anniversary of the iPhone, Apple has cut orders for the first quarter of next year by 40 percent.
“Few can be sure where the rumors started and fewer can be sure whether the rumors will prove true, but the first thing investors did was dump Apple suppliers like Largan,” Tang said, adding that investors will have to wait for Apple’s investor conference next month to get reliable information on iPhone sales.
According to MasterLink Securities, Largan is expected to report earnings per share (EPS) of NT$305.99 next year, up from an expected NT$208.88 this year.
“So far, we have no plans to revise next year’s estimate before we get real figures on Apple’s sales and Largan’s operations,” Tang said.
“Based on the EPS forecast for next year, Largan’s current valuation with a price-to-earnings ratio of about 13 is low since the stock was hammered in recent sessions,” he added.
The key to Largan’s stock price in the near future will be foreign institutional investors’ strategies, Tang said.
“If they stand on the sell side and cast a no-confidence vote on the iPhone X, the NT$4,000 level will not provide technical support for Largan shares,” Tang said.
Foreign institutional investors owned a 52.25 percent stake in Largan as of Monday, the Taiwan Stock Exchange said.
Concerns over shipments of the iPhone X also affected other major suppliers in Taiwan, with contract chipmaker Taiwan Semiconductor Manufacturing Co (台積電) down 1.09 percent to close at NT$226, and iPhone assembler Hon Hai Precision Industry Co (鴻海精密) down 0.98 percent to end at NT$91.20.
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