Largan's target price raised to over NT$7,000

2017/09/09 19:05:59 fontsize-small fontsize-default fontsize-big
CNA file photo

CNA file photo

Taipei, Sept. 9 (CNA) An Asian brokerage has hiked its target price on shares of smartphone camera lens supplier Largan Precision Co. (大立光) to more than NT$7,000, citing optimism toward the Taiwanese manufacturer's outlook.

In a research report, the brokerage said Largan is expected to secure most of Apple Inc.'s orders for 3D sensor camera lenses for the latest iPhones, which are due to be released this month.

In addition, the increasing use of dual camera lenses by international smartphone brands is likely to further boost Largan's shipments this year, the brokerage said.

As a result, the brokerage said, it was raising its target price on Largan shares from NT$5,400 to NT$7,350 and keeping its "buy" recommendation.

CNA cannot identify the brokerage because media outlets in Taiwan are not allowed to report the names of foreign brokerages when they give price forecasts for specific stocks.

On Friday, Largan shares closed up 0.42 percent at NT$5,970.00 on the Taiwan Stock Exchange, remaining the most expensive stock on the local equity market.

With the new target price of NT$7,350, investors will have to pay more than NT$7 million for one block of Largan shares, since stocks in Taiwan are sold in minimum blocks of 1,000.

According to the Asian brokerage, dual camera lenses are expected to account for 30 percent of the total global smartphone camera lens sales in 2018, and 45 percent in 2019, up from a forecast 15 percent in 2017.

Citing the anticipated high demand for dual lenses from Apple and other brands, the brokerage also raised its forecast for Largan's 2018 earnings per share by 0.2 percent to NT$334.7, and for 2019 by 4.6 percent to NT$427.7.

Meanwhile, a U.S. brokerage has estimated that Largan's consolidated sales for September will show a monthly growth of about 12.84 percent, rising to NT$5.7 billion from NT$5.01 billion in August, on optimism regarding orders from Apple.

In addition, the U.S. brokerage said, Largan is expected to benefit from deferred orders from Chinese smartphone brands, which will help maintain its growth momentum into the fourth quarter of the year.

The U.S. brokerage retained its target price of NT$6,100 and its "overweight" rating on Largan.

(By Jeffrey Wu and Frances Huang)

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