Zhong Yang Technology Co (中揚光電), a start-up that makes camera lenses for mobile phones, yesterday saw its share price nearly triple to NT$228.41 during its local debut, as the dual-camera trend spreads from premium models to mid-range smartphones.
The company was traded on the Emerging Stock Market, a preparatory board for the nation’s two main bourses, at an initial public offering price of NT$58 per share.
Apple Inc’s major iPhone assembler, Hon Hai Precision Industry Co (鴻海精密), owns a 15 percent stake in Zhong Yang, the company’s prospectus said.
The company, established in 2013, also makes camera lenses for other companies on a contract basis. It has paid-in capital of NT$600 million (US$19.99 million).
The company is a “beneficiary of robotics in an optical upcycle,” Yuanta Securities Investment Consulting Co (元大投顧) analyst Jeff Pu (蒲得宇) said in a report on Wednesday. “We continue to expect a strong optical upcycle in the second half of this year through 2019, driven by the rising adoption of multi-camera and higher lens elements, specifically for 3D sensing.”
The penetration rate of dual cameras is predicted to rise from 16 percent this year to 29 percent next year, Pu said, adding that the number is to rise to 40 percent in 2019.
Hon Hai has increased its holding of Zhong Yang shares to 29 percent, which could lead to an order allocation for Zhong Yang in camera lens maker Kantatsu Co, a Japanese subsidiary of Sharp Corp, as Hon Hai’s Sharp subsidiary holds a 44 percent stake in Kantatsu.
During the first half of this year, the company generated NT$103 million in net profit, a spike from NT$35 million a year earlier, a company filing with the Taiwan Stock Exchange said.
Over the same period, Zhong Yang maintained stable gross margin at about 54 percent, while revenue grew to NT$417 million, from NT$183 million the previous year.
The strong growth came as 3D sensing gained traction in smartphones and as lens demand increased, Pu said.
Zhong Yang has more than 400 employees globally, with production sites and research and development centers in Taiwan and China to provide after-sales services for its customers, the prospectus said.
The company is set to expand capacity and facilitate vertical integration with the aim of maintaining its industry-leading position, it said.
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