Largan profits rise, sales to improve

PEAK SEASON::Largan CEO Adam Lin said that production has reached full capacity and would continue unchanged through next month, while orders have been steady

By Natasha Li  /  Staff reporter

Fri, Jul 12, 2019 - Page 12

Handset camera lens supplier Largan Precision Co (大立光) yesterday reported a 29.62 percent increase in net profit for last quarter to NT$6.55 billion (US$211.1 million) from NT$5.05 billion in the first quarter, or earnings per share (EPS) of NT$48.84.

The Taichung-based firm posted revenue of NT$14.08 billion for last quarter, up 43.34 percent on a quarterly basis, while gross margin rose by 5.36 percentage points to 69.6 percent.

In the first half of the year, net profit surged by 22 percent year-on-year to NT$11.6 billion, with EPS rising from NT$70.97 to NT$86.51 over the period, Largan said.

Revenue increased 13 percent to NT$23.9 billion in the first six months, with 10-megapixel lenses making up 50 to 60 percent of total shipments, followed by 20-megapixel lenses and higher, which contributed 20 to 30 percent, while 8-megapixel lenses made up another 10 to 20 percent, the company said.

As the consumer electronics industry enters the peak season this quarter, Largan chief executive officer Adam Lin (林恩平) told an earnings’ conference yesterday that sales would improve this month after a decline last month, adding that production has reached full capacity and would continue unchanged through next month.

Lin remained confident, despite investor concerns over the company’s prospects due to the US-China trade dispute, saying that Largan has only been mildly affected and orders have remained relatively steady.

As new smartphone models with multi-camera configurations continue to hit the market, Largan said it is to increase production capacity.

However, Lin was reluctant to share details of the company’s expansion plans, saying only that the firm has extra floor space that could be used to expand capacity, while other land purchase deals remain under review.

Largan’s application to vertically expand its plant at the Taichung Industrial Park (台中工業區) under a government program aimed at increasing domestic production space has been approved by the Ministry of Economic Affairs, Export Processing Zone Administration Deputy Director Yang Po-keng (楊伯耕) said.

The company owns nine plants in Taiwan and two in China. It counts Huawei Technologies Co Ltd (華為), Apple Inc, Samsung Electronics Co Ltd, Oppo Mobile Telecommunications Corp (歐珀) and Vivo Communication Technology Co (維沃) among its major clients.

Although Largan specializes in the production and design of plastic aspherical lenses, Lin said that the company is also designing “G+P” (glass and plastic) periscope lenses to meet client demand.

Largan is also in the process of designing eight-piece lenses, while shipping of seven-piece lenses started late last year, Lin said.

Despite price pressure from clients, Lin said that the company’s high-end lenses are rarely affected.

Largan shares rose 3.61 percent to NT$4,305 in Taipei trading yesterday.