Tue, Jan 09, 2018 - Page 12 News List

Largan shares dip 4.75 percent on soft sales results

WEAK DEMAND:Largan saw orders from ‘some’ customers (Apple) in November last year, while its sluggish performance last month was due to a cut in orders from China

By Lauly Li  /  Staff reporter

Shares in Largan Precision Co (大立光), which supplies camera lenses for Apple Inc’s iPhones, yesterday dived 4.75 percent to close at NT$3,930 in Taipei trading after the company reported soft sales results for last month and gave a conservative outlook for this month.

Shortly after the opening bell yesterday, Largan plunged 6.82 percent, or NT$280, to NT$3,820 from the closing price of NT$4,100 on Friday last week.

Largan’s stock price fluctuated during the session and eventually closed at NT$3,930 after a total of 1.17 million shares changed hands, according to data from the Taiwan Stock Exchange.

The Taiwanese camera lens supplier on Friday last week reported revenue of NT$4.87 billion for last month, a contraction of 10.43 percent year-on-year and 13.91 percent month-on-month.

Largan expects to record another monthly drop in revenue this month, as the first quarter is traditionally a slow season for the electronics industry, the company said.

Although Largan in November last year told investors that it expected a monthly decline in sales for last month due to weak demand from “some” customers, the double-digit plunge was deeper than market expectations.

Largan’s sluggish performance last month was mainly due to significant cuts in orders from Largan’s Chinese clients — Oppo Mobile Telecommunications Corp (歐珀移動) and Vivo Electronics Corp (維沃移動通信), Yuanta Securities Investment Consulting Co (元大投顧) said.

Largan’s operational performance this quarter could be worse on softening iPhone X demand, Yuanta analyst Jeff Pu (蒲得宇) said in a client note on Friday.

While Largan’s leading position in the lens industry is expected to remain solid, the company might not be immune to a slowdown in demand in the smartphone industry and a potentially slower-than-expected migration of camera lens specifications this year, Pu said.

Pu forecast Largan’s stock price to continue underperforming in the near term.

After factoring in last month’s revenue, Largan’s net profit for the whole of last year could total NT$25.75 billion (US$872.2 million), or NT$192 per share, he said, compared with his previous estimate of NT$26.45 billion, or NT$192.7.

Pu said his outlook on Largan would turn positive if there were signs that Largan’s lens composed of seven pieces of plastic was being broadly adopted in the smartphone industry.

In related news, Genius Electronics Optical Co (玉晶光), a smaller rival of Largan, yesterday posted revenue of NT$1 billion for last month, the company’s highest monthly record since October 2015.

The NT$1 billion result represented growth of 40.54 percent year-on-year and 7.49 percent month-on-month, a company filing with the Taiwan Stock Exchange showed.

The company’s cumulative revenue last year increased 14.45 percent to NT$8.02 billion, it said.

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