Largan Precision Co (大立光), which supplies camera lenses for handheld devices, and includes Apple Inc among its clients, yesterday said its sales would increase this month and next month, after posting a record profit of NT$3.72 billion (US$125.78 million) for last quarter.
“Judging from the orders the company has received, sales will continue achieving sequential growth this month and next month,” Largan chief executive officer Adam Lin (林恩平) said in a conference call.
STRONG CLIENT DEMAND
“Overall, clients’ demand is healthy and strong, but the final outcome depends on the amount of pull-in orders,” Lin said of clients’ plans to introduce high-end smartphones this quarter.
Lin’s comments echoed market expectations that Largan would get a boost in the current quarter from Apple’s upcoming launch of the next-generation iPhone.
Net profit for the April-to-June quarter rose 24.08 percent from NT$2.99 billion during the first three months of the year, representing an 82.8 percent increase from NT$2.03 billion the previous year, Largan said.
Earnings per share in the second quarter were NT$27.75, beating an analysts’ consensus estimate of NT$25.
Largan attributed the strong showing to an expansion in the scale of its production, improvements to product diversity and better-than-expected yield rates.
HIGHER PIXEL MARKET
Lin said many of Largan’s clients in recent quarters placed more orders for camera lenses that had higher pixel counts, adding that such a trend is beneficial to both sales and gross margin.
Gross margin reached 58.19 percent last quarter, higher than the 55.6 percent seen in the previous quarter, beating the previous record high seen in the fourth quarter of 2006.
Camera lenses with 5 million pixels accounted for 20 to 30 percent of Largan’s total shipments last quarter, while those with 8 million pixels accounted for 30 to 40 percent.
Camera lenses with more than 10 million pixels accounted for 10 to 20 percent, the company said.
In terms of proportion, demand for camera lenses with less than 1 million pixels decreased significantly last quarter and accounted for only a single digit percent of Largan’s total shipments, compared with a share of between 10 and 20 percent the previous quarter, it added.
CHINESE BRANDS
“Chinese smartphone brands such as Xiaomi Corp (小米) and Huawei Technologies Co (華為) were the main drivers of Largan’s net profit last quarter, and they are all upgrading their products’ spec aggressively in a bid to compete with Apple,” Deutsche Bank analyst Birdy Lu (呂家霖) said by telephone.
Lu estimated Chinese smartphone vendors contributed 35 percent to Largan’s total sales of NT$9.97 billion last quarter followed by Apple with a 30 percent share.
He projected the company’s sales for this quarter would grow 15 percent to NT$11.47 billion from last quarter as Apple is rumored to be unveiling the iPhone 6 in September.
Largan shares fell 3.98 percent to close at NT$2,530 in Taipei trading yesterday.
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