Shares of Largan Precision Co. closed unchanged Monday, underperforming the broader market, as the supplier of smartphone camera lenses to Apple Inc. reported a 17 percent plunge in sales in January from a month earlier.
Largan shares moved in a narrow range and ended flat at NT$2,030.00 (US$73.02), while the benchmark Taiex rose 1.23 percent on Monday, the first trading session after the Lunar New Year break, on a rally by U.S. markets during the holiday.
Dealers said the lack of movement in Largan shares reflected caution toward the company in the first quarter, a traditional slow season for the smartphone industry, after the sales fall in January.
In a statement issued over the weekend, Largan said it posted consolidated sales of NT$3.73 billion in January, down 17 percent from a month earlier.
The January revenue was also down 19 percent from a year earlier and the lowest for any month since June 2021, when it posted sales of NT$3.37 billion.
Largan had forecast that slow season effects could send its sales lower in January than in December.
The company has also been hurt by supply shortages of raw materials, and those shortages could cause its sales to fall further in February, the statement said.
In January, lenses with a resolution of 20 megapixels or more — a higher-margin product and one of Largan's specialties — accounted for 10-20 percent of its total sales, the company said.
Lenses with 10-20 megapixels accounted for 50-60 percent of the company's sales, 8-10 megapixel lenses made up about 10 percent, and other products such as voice coil motors contributed 20-30 percent, the company said.
Following the January sales report, a U.S. brokerage said it lowered its target price for Largan shares by 3 percent to NT$1,709.00 and left its "sell" recommendation unchanged, saying it was cautious about Largan's bottom line amid escalating competition.
Largan posted NT$18.67 billion in net profit in 2021, down 24 percent from a year earlier, with earnings per share of NT$139.13, the lowest since 2013 when it had EPS of NT$71.64.
Largan's consolidated sales fell 16 percent year-on-year in 2021 to NT$46.96 billion, and its gross margin — the difference between revenue and cost of goods sold — fell 7.02 percentage points to 59.95 percent, according to the company.
Source: Focus Taiwan News Channel