Largan posts 3Q profit of NT$7.76bn

MEGAPIXELS::Largan Precision Co said that better-priced smartphone camera lenses of 10 megapixels or higher accounted for up to 80 percent of total 3Q shipments

By Lauly Li  /  Staff reporter

Fri, Oct 13, 2017 - Page 12

Largan Precision Co (大立光), the world’s leading smartphone camera lens supplier, yesterday posted a net profit of NT$7.76 billion (US$256.84 million) for last quarter, up 11.49 percent annually and 64.75 percent quarterly on strong demand.

Earnings per share were NT$57.93, compared with NT$51.91 a year ago and NT$35.16 the previous quarter.

The gross margin gained 1.25 percentage points to 67.93 percent from last quarter, while its operating margin added 0.89 percentage points to 58.92 percent, the company said.

“A better product portfolio was the main reason behind the quarterly improvement in gross margin performance,” Largan chief executive officer Adam Lin (林恩平) told a teleconference yesterday.

Better-priced camera lenses with 10 megapixels or higher accounted for between 70 percent and 80 percent of Largan’s total shipments last quarter, but the production yield did not contribute much to the margin expansion, Lin said.

“I am not satisfied with the yield. I think there’s still room for improvement,” he said.

Largan’s revenue performance this month is estimated to be better than last month’s NT$5.44 billion, Lin said, but the performance for next month is unclear for the time being.

“We are not sure about next month’s shipments, because the clients are making adjustments to their orders,” Lin said.

However, Largan remains committed to gradually increasing the production capacity of its new plant in Taichung, he said, adding that increasing the specifications of handset cameras to bigger apertures and higher resolutions continues to be a major trend in the market.

An increasing number of handset vendors are adopting camera lens that are composed of six layers of plastic, while some clients are to adopt Largan’s camera lens, which is fabricated with seven layers, in the coming year, he said.

Camera lenses with seven layers enable better control of light at a bigger aperture and support higher resolutions, compared with lenses made with six layers, Largan said.

Investors who joined Largan’s teleconference were interested in the company’s development on the 3D sensing camera lens solutions, as Largan is reportedly part of Apple Inc’s 3D sensing supply chains.

Lin said Largan is evaluating the feasibility to completely use glass to produce aspheric lens for 3D sensing technology.

It is also applicable to use layers of glass and plastics, or completely use plastics, to manufacture camera lens for 3D sensing technology, Lin said.

Largan can reopen its full glass production line if the clients decide to adopt full glass lens for 3D sensing, he said.

“The main difference between the 3D sensing camera lens solutions is the choice of material. Other than that, Largan has the advantage in manufacturing and testing,” Lin said.

Largan shares yesterday rose 3.97 percent to close at NT$5,635 on the Taiwan Stock Exchange in Taipei, where the benchmark TAIEX edged up 0.66 percent.