Fri, Jul 13, 2018 - Page 12 News List

Largan mum on new technology

EXPANDING OPERATIONS:The company is still scouting for land to build a new plant, and is developing new specifications and applications for smartphone camera lenses

By Ted Chen  /  Staff reporter

Smartphone camera lens supplier Largan Precision Co (大立光) yesterday remained tight-lipped about the company’s capacity expansion plans, only saying that it is pursuing new technology.

The company is developing new specifications and applications for smartphone camera lenses, which would be produced at a new plant, Largan chief executive officer Adam Lin (林恩平) said during an investors’ teleconference.

The new lenses would be all plastic and be made with a revamped manufacturing process, Lin said, adding that the company’s expansion plans would begin to take shape by 2020.

However, Lin declined to reveal further details and sources of demand that would fill the company’s growing capacity, citing confidentiality agreements with its customers.

Last month, Lin said the company was seeking to buy a 30,000 to 40,000 ping (99,174m2 to 132,232m2) plot of land to expand its production capacity.

“While the central and local governments have pledged their assistance in resolving land scarcity, our search for land still faces numerous challenges,” Lin said, adding that the process would take some time.

For this quarter, the company expects sales to see sequential gains over this month and next month, as the industry enters the high season and clients launch new models, Lin said, adding that sales this quarter would likely outperform those of the second quarter.

Two of the company’s newly developed leading-edge offerings — a lens with seven pieces of plastics and a telephoto lens — are to commence shipments next year and contribute to revenue, he said.

The prevailing trends in smartphone photography, namely the triple camera design and telephoto lens, are not mutually exclusive, and the company is prepared to meet customers’ varying design specifications, he said.

Asked about the latest round of tariffs imposed by the US on China, Lin said that glass lenses from its plants in China account for only a small portion of revenue.

Asked about Largan’s development of applications other than handset camera lenses, Lin said that glass lenses show promise in automotive applications, but the company’s progress in this segment remains limited.

While automotive applications have a lower technological barrier, obtaining certification from automakers is difficult, he added.

The company also released financial results for last quarter. Net income rose 36.87 percent quarterly and 16.69 percent annually to NT$5.5 billion, with earnings per share of NT$41.01.

Revenue during the quarter rose 38.5 percent quarterly and 9 percent annually to NT$12.3 billion, while gross margins gained 5.28 percentage points to 68.61 percent, the company said.

Net income in the first half of the year edged down 0.81 percent annually to NT$9.52 billion, or NT$70.97 per share, while revenue fell 4 percent annually to NT$21.17 billion, the company said.

Shares of Largan closed up 2.71 percent at NT$4,930 in Taipei trading ahead of the teleconference.

The stock, which has risen 19.4 percent this year, has further upside, Yuanta Securities Investment Consulting Co (元大投顧) said, citing good prospects for OLED-equipped iPhone demand in the second half of this year and faster-than-expected adoption of triple camera design by the industry.

“In addition, Largan’s comments on specs migration and capacity expansion will be read as positive by the market,” Yuanta analyst Jeff Pu (蒲得宇) said in a note yesterday.

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