Largan shares jump after target price upgraded
Central News Agency
2014-02-21 11:43 AM
Taipei, Feb. 21 (CNA) Shares of Largan Precision Co., one of Taiwan's leading smartphone camera lens suppliers, soared Friday morning after Deutsche Securities raised its target price on the stock amid upbeat earnings prospects, dealers said. Buying in Largan shares also spread to other highly-priced stocks in the local bourse to push up the broader market after Wall Street's gains overnight, they said. As of 11:16 a.m., shares of Largan had added 7 percent, the maximum daily increase, to NT$1,245.00 (US$41.09), with 1.64 million shares changing hands. The weighted index on the Taiwan Stock Exchange was up 0.77 percent at 8,590.66 points. "Judging from the current strong showing of Largan shares, I suspect institutional investors resumed buying in the stock," Ta Ching Securities analyst Andy Hsu said. "The latest research note released by Deutsche Securities is the catalyst to the uptrend." Hsu said Largan shares had been consolidated in recent sessions, and the research note prompted many bargain hunters to pick up the stock soon after the local bourse opened. Deutsche Securities raised its target price on Largan shares to NT$1,500 from NT$1,400, recommending a "buy" on the stock. The target was the highest among those set by foreign brokerages, including Goldman Sachs's target of NT$1,480 and Bank of America Merrill Lynch's NT$1,450. According to Deutsche Securities, Largan is expected to benefit from efforts to upgrade its lens production technology to launch zoom lens products later this year, a move which could help the company maintain its lead over its peers. The brokerage said Largan is expected to post NT$88.80 in earnings per share in 2014, and its bottom line could further improve in 2015 with EPS of NT$115. In 2013, Largan witnessed its net profit shoot up 72 percent from a year earlier to NT$9.61 billion. EPS for 2013 stood at NT$71.64, a record high in the company's history, up from NT$41.58 a year earlier. "Largan is a growing company. My brokerage has estimated that its EPS for 2014 will range between NT$75 and NT80," Hsu said. "The company is expected to see its sales improve after Apple Inc. launches the new generation of iPhones later this year, a gadget which is very likely to be equipped with more sophisticated lenses," he said. Currently, Apple is the largest buyer of Largan's products, accounting for about 40 percent of the Taiwanese firm's total sales, according to Hsu said. "I am also looking for more orders from Chinese smartphone makers who are gearing up to unveil new models with upgraded lens equipment," Hsu said, adding that China's buyers made up about 10 percent of Largan's total revenue. After the current solid gains, however, Largan shares have moved closer to the nearest technical resistance at around NT$1,255, and investors should keep alert over a pullback, Hsu cautioned. (By Tien Yu-pin and Frances Huang)
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