Largan revenue slips from record high

ROSY?:Despite a dip, Largan’s long-term outlook is expected to be favorable, with growing competition from smartphone makers needing higher-pixel camera lenses

By Helen Ku  /  Staff reporter

Mon, Feb 10, 2014 - Page 13

Largan Precision Co (大立光), which supplies camera lenses for Apple Inc’s iPhones and iPads, reported a 23.96 percent decline in revenue last month to NT$2.42 billion (US$80.12 million) due to slow seasonal demand.

In December last year, Largan posted a monthly revenue of NT$3.19 billion, a record high.

Last month’s sales figure, released on Friday, is largely in line with the company’s guidance, as it reflects growth of 8.14 percent from NT$2.24 billion recorded in the same period last year.

“Based on orders in hand, sales this month and next month are likely to achieve annual growth despite seasonal factors,” Largan chief executive officer Adam Lin (林恩平) told investors in an earnings telephone call on Jan. 23.

Largan supplies handset camera lenses not only to Apple, but other smartphone makers, including China’s ZTE (中興), Huawei Technologies (華為), Xiaomi (小米) and Lenovo Group Ltd (聯想), South Korea’s LG Electronics Inc, Taiwan’s HTC Corp (宏達電) and Finland’s Nokia Oyj.

Deutsche Bank analyst Birdy Lu (呂家霖) said that Largan’s long-term business prospects remain promising.

“The intensifying competition in the smartphone market will certainly push each brand to differentiate their products in order to stand out,” Lu said by telephone on Friday.

“Largan will benefit from the competition because more smartphone vendors will adopt higher-pixel camera lenses for their products,” he added.

To supply growing orders for higher-pixel camera lenses, Largan plans to set up a new plant in Greater Taichung as part of its expansion plan, Lin told investors last month.

In December 2012, the Ministry of Economic Affairs approved Largan’s plan to make a NT$10.2 billion investment in Greater Taichung.

However, because of a shortage of land, Largan has not found a place to build its factories.

“The case is pending the local government’s response,” Lin said in the earnings call, in response to investors’ questions of when Largan can acquire new production capacity.

Largan is seeking to build a plant on 4 hectares of land next to its headquarters in the Taichung City Precision Machinery Innovation Technology Park.

The company also plans to hire 3,000 to 5,000 more employees for new assembly lines, the Central News Agency cited Lin as saying in a report. That will double the firm’s current employees, the CNA said.