Thu, Oct 10, 2019 - Page 12 News List

Latest smartphones help boost Largan net profit 30.75%

NEW TECHNOLOGY:The firm is looking to expand production as clients have demanded some upgrades, while it has also started making eight-piece lenses

By Natasha Li  /  Staff reporter

Camera lens supplier Largan Precision Co (大立光) yesterday posted a net profit of NT$8.57 billion (US$277.8 million) for last quarter, a 30.75 percent year-on-year increase, with earnings per share rising to NT$63.85.

However, gross margin decreased by 2.19 percentage points from a year earlier to 69.11 percent, dragged down by lower production yields for new products and foreign-exchange losses, the company said.

Third-quarter revenue, released on Saturday last week, increased 13.15 percent year-on-year to a record-high NT$18.48 billion, thanks to orders for new smartphone models from Apple Inc, Samsung Electronics Co and Huawei Technology Co (華為).

“Orders should remain steady this month, while a slight decline might occur next month,” Largan chief executive Adam Lin (林恩平) told an earnings conference yesterday.

Lin said the company has no clear order visibility for December, given the current macroeconomic environment.

Jih Sun Securities Investment Consulting Co (日盛投顧) said in a research note on Monday that orders from a major US client would continue to benefit Largan this quarter, but the impacts of the US-China trade talks, as well as other international political and economic developments remain to be seen.

In the first three quarters, net income totaled NT$20.17 billion, or earnings per share of NT$150.37, while gross margin was 68.15 percent, Largan said.

Largan is looking to further expand its production capacity as clients have demanded various upgrades to camera lenses, Lin said, adding that the company had started production of eight-piece lenses.

“We cannot be sure when we will go into mass production [of eight-piece lenses] … now we have three plots of land available, with one production facility ready,” he said.

All of the new production sites are scheduled to be completed in four years, he said.

The sites might also serve as production sites for new camera lenses that are still under testing, he said.

The company is in talks with clients over the new technology, which could prove to be a challenge as some remain reluctant to adopt the new lenses due to quality concerns, he said.

Largan is also developing “G+P” (glass and plastic) periscope lenses to cope with the problem of plastic lenses overheating, he added.

“We can purchase glass [to create G+P lenses], but we can also produce it by ourselves,” Lin said.

Largan shares yesterday fell 0.45 percent to close at NT$4,460 in Taipei trading.

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