Despite posting record-high sales for last month and last quarter, Largan Precision Co (大立光) saw its share prices close yesterday at the lowest daily limit, with investors worried that sales of Apple Inc’s iPhone would weaken this quarter.
Largan, the world’s largest mobile phone camera lens maker, ended down 6.98 percent at NT$746 in Taipei trading.
Last year, Largan’s shares rose 34.76 percent, boosting the company’s market capitalization by 5.16 percent from 2011, Taiwan Stock Exchange data showed.
Jeff Pu (蒲得宇), an equity research analyst at Fubon Securities Investment Services Co (富邦投顧), yesterday said that Largan’s shares’ weakness reflected market concerns about slowing iPhone sales in the first quarter.
Fubon cut its target price on Largan shares to NT$1,000 from NT$1,040, on a lower estimate of NT$38.3 in earnings per share for last year, compared with NT$38.8 in earnings per share in 2011, as a result of lower iPhone shipments. However, the shares’ pullback would be “short-lived,” Pu said in a note to clients.
As the industry moves toward products with shorter life cycles, Largan’s diversified client base, the potential addition of new clients in the second quarter and the industry’s continued development in hardware specifications would favor the company in the medium term, Pu added.
“As the industry mix shifts to products with shorter life cycles, we believe Largan will be able to extend its lead against rivals due to its production flexibility, wide range of products and technology,” he wrote.
The Greater Taichung-based firm counts smartphone makers such as Apple, HTC Corp (宏達電), Research In Motion Ltd and Nokia Oyj, as well as Chinese handset makers like Huawei Technologies Co (華為) and ZTE Corp (中興), as its major customers.
On Saturday, the company said in a stock exchange filing that its consolidated revenue rose 5.02 percent to NT$3.16 billion (US$108.5 million) last month from the previous month, and surged 142.7 percent from a year earlier.
In the fourth quarter of last year, Largan’s consolidated sales expanded 90.59 percent to NT$8.58 billion from the third quarter’s NT$4.5 billion, reaching a record level.
For the whole of last year, the company again registered record-high revenue of NT$20.07 billion, up 25.57 percent from 2011, the filing showed.
This quarter, Fubon forecast Largan’s sales would drop 23 percent to NT$6.63 billion because of a reduction in iPhone shipments.
The introduction of several models with 12-megapixel (MP) or 13MP lenses this quarter, including HTC’s M7 and flagship products by Huwei and ZTE, are likely to support Largan’s margins, with gross margin expected to reach 40.8 percent and operating margin 32.1 percent, the brokerage said.
Separately, local rival Genius Optical Co (玉晶光) yesterday said its consolidated revenue dropped 27.34 percent month-on-month and 3.17 percent year-on-year to NT$982.35 million last month.
For the whole of last year, revenue increased 35.57 percent to NT$11.42 billion, the company said in a filing to the Taiwan Stock Exchange.
Smaller rival Kinko Optical Co (今國光) yesterday said its revenue fell 17.03 percent month-on-month and 29.95 percent year-on-year to NT$405.16 million last month.
For last year, revenue totaled NT$6.74 billion, up 10.2 percent from 2011, Kinko said in a separate stock exchange filing.