Largan Precision shares hit record high mid-session Thursday

Shares in Largan Precision Co. (???), the most expensive stock in Taiwan, passed the NT$4,000-mark during the mid-morning session on the local stock market Thursday, the third trading day of the new year, dealers said.

Following optimistic forecasts by foreign investment analysts, shares in Largan, a smartphone camera lens supplier to Apple, gained nearly 6 percent to hit a record high of NT$4,005 (US$125.70) at 10:45 a.m.

Despite the first quarter being the low season for iPhone 7 sales, foreign institutional investors remain upbeat about Largan's performance over the quarter, with two foreign institutional investors on Wednesday announcing a price estimate for the company of NT$$5,000 per share.

According to a report by a U.S. financial analyst, Largan is at full production capacity and has strong stock-up demand for iPhone 7 Plus in the first quarter, resulting in an upward revision of the price estimate for the company from NT$4,500 to NT$5,000 per share.

International analysts forecast Largan will post 59 percent and 98 percent growth in its Q1 business turnover and earnings, respectively.

Meanwhile, the company's gross profit margin was forecast to grow 69.7 percent in the first quarter, down 0.6 percentage points from the fourth quarter of 2016, but up 10 percentage points from the same period last year.

Looking ahead to the second quarter, foreign analysts said that the roll-out of new devices with dual-lens cameras in the second quarter by major smartphone makers, is expected to benefit Largan.

They forecast the penetration rate of Apple's iPhones and China's dual-camera phones could climb from 12 percent and 7 percent last year to 45 percent and 21 percent respectively, this year, which would boost the cumulative demand for smartphone camera lenses from Largan from 5 percent last year to 16 percent this year and 26 percent next year.

Largan is set to issue its December sales report later Thursday and is scheduled to hold an investor conference on Jan. 12.

Source: Focus Taiwan News Channel