Taipei--A Japanese brokerage firm has raised its target price on shares of smartphone camera lens supplier Largan Precision Co. (???), amid optimism toward the manufacturer's technological lead over its peers.
Due to its efforts in developing high-end smartphone camera lenses, the brokerage said, Largan is expected to see its average selling price (ASP) of the devices rising, so the stock deserves a higher target price.
In a research note, the Japanese brokerage said it has upgraded its target price on Largan shares over the next 12 months to NT$5,860 (US$192.47) from NT$5,200, while leaving a "buy" recommendation on the stock unchanged.
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, shares of Largan, one of the most important suppliers to Apple Inc., fell 0.92 percent to close at NT$4,850.00, but remained the most expensive stock in the local equity market. The latest losses suffered by Largan were in line with the broader market, where high-tech stocks came under pressure after their counterparts on Wall Street fell on Thursday.
However, Largan has made a strong showing in the first half of this year on hopes that the next-generation iPhones, likely to be launched in September, will boost its shipments for 2017 and its bottom line is expected to improve on dual lens adoption by more international smartphone brands.
Since the beginning of this year, Largan has risen almost 28 percent, serving as one of the drivers to the gains posted by the main board, where the weighted index has risen 1,141.57 points, or 12.3 percent.
The Japanese brokerage said that Largan's technological lead in the global market is expected to boost the ASP of its high-end six-element camera lenses by more than 50 percent.
In 2016, Largan posted the highest-ever annual net profit of NT$334.25 billion and record high sales of NT$947.94 billion in 2016. Its 2016 earnings per share (EPS) stood at NT$169.40, the highest EPS of any listed company in Taiwan. The brokerage said that Largan's EPS is expected to rise to NT$222.9, NT$325.55 and NT$355.41, respectively, in 2017, 2018 and 2019.
The firm said that the estimated EPS for 2018 and 2019 of more than NT$300 is expected to encourage investors to pick up the stock.
As of Friday, Largan's market capitalization had hit NT$650.58 billion, the fifth-largest on the main board, according to the Taiwan Stock Exchange.
Source: Focus Taiwan News Channel