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June 24, 2017

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Largan Precision Co. shares climb above NT$2,000 mark

TAIPEI -- Shares of Largan Precision Co. (大立光電), one of Taiwan's leading smartphone camera lens suppliers, hit a record high Friday, ending above the NT$2,000.00 (US$66.45) mark after a foreign brokerage raised its target price on the stock, dealers said.

The strong buying also reflected optimism toward Largan shipments on hopes that the "Apple concept stock" will benefit from Apple Inc.'s expected unveiling of its next-generation iPhone later this year, dealers said.

The U.S. consumer electronics giant accounts for about 40 percent of Largan's total sales.

Shares of Largan rose 4.79 percent to close at NT$2,080.00, with 1.44 million shares changing hands. The weighted index on the Taiwan Stock Exchange ended up 0.43 percent at 9,008.22 points.

Extending the strength seen in the previous session, Largan shares opened higher in a knee-jerk reaction to a research report by CIMB Securities that raised its target price on the stock to NT$2,450 from NT$2,350.

The momentum continued until the end of the session as investors embraced high hopes that Apple will launch new devices at the Worldwide Developers Conference (WWDC) on June 2, dealers said, adding they suspected the buying came largely from foreign institutional investors.

The stock remains the most expensive on the local market.

Stocks of Apple Camp Ride the Rise

Other local Apple suppliers such as metal casing maker Catcher Technology Co. (可成科技) and Hon Hai Precision Industry Co. (鴻海精密) also gained during the session, ending up 3.70 percent at NT$280.00 and 1.09 percent at NT$93.00, respectively.

CIMB Securities said Largan could see a 33-percent sequential increase in sales in the second quarter as Apple will start to place large orders in June for components for its next iPhone.

Largan is expected to win orders for its high-end camera lens, which will continue to strengthen its bottom line, the brokerage said.

It raised its forecast for Largan's earnings per share by 2-4 percent for 2014, 2015, and 2016, to NT$119.7, NT$143.9 and NT$161, respectively.

Barclays Capital said that with the release of Apple's new products, Largan is expected to post a 50-60 percent increase in shipments in the second half of this year from the first half.

In April, Largan's consolidated sales hit a monthly record of NT$3.21 billion, up 14 percent from the previous month and 68 percent year-on-year.

In the first four months of the year, the company's consolidated sales rose 43 percent year-on-year to NT$10.06 billion.

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