Handset camera lens manufacturer Largan Precision Co (大立光) yesterday gave a conservative outlook for business next quarter amid a global economic slowdown.
“The third quarter is traditionally a high season [for the electronics industry]. We hope that it will be the same this year,” Largan chief executive officer Adam Lin (林恩平) told an online news conference, following an annual general meeting in Taichung yesterday.
However, order visibility is low, Lin said.
Photo: CNA
The Taichung-headquartered company has faced strong headwinds since the spread of COVID-19 early this year, as economic activity worldwide ground to a halt.
Despite strong first-quarter results due to rush orders, the company has posted annual declines in monthly revenue over the past two months, ending eight consecutive months of double-digit percentage growth.
“Some clients are continuing to place orders as usual, but some have trimmed quite a few [orders],” Lin said, adding that the sharp decline in orders is mainly due to US sanctions on Huawei Technologies Co (華為) amid souring trade relations between the US and China.
Still, Largan would benefit from upcoming product launches on the customers’ end, Lin said, adding that he expects an improved utilization rate at the company’s plants next quarter.
Lin’s remarks came as Apple Inc, one of Largan’s biggest customers, is speculated to start mass production of its new iPhone models next month, following second-phase engineering validation and testing, before unveiling its iPhone 12 lineup by the end of the third quarter, the Chinese-language Digitimes reported yesterday.
Construction of one of Largan’s new plants in the Taichung Industrial Park (台中工業區) has started, with a second scheduled to launch by the end of the year, Lin said.
The company’s new facilities are expected to be completed by 2023, he said.
Largan shareholders approved a plan to distribute a cash dividend of NT$79 per common share, a historic high.
That represents a payout ratio of 37.49 percent based on earnings per share of NT$210.7 last year.
Largan’s shares inched up 0.23 percent to close at NT$4,400 in Taipei trading yesterday.
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