Taipei, Shares of Largan Precision Co., a Taiwanese supplier of smartphone camera lenses to Apple Inc., encountered heavy selling Friday after the company gave a cautious outlook for its September sales, dealers said.
The selling also reflected worry that Apple will not use triple camera lenses in its next generation iPhones in 2019, which would affect Largan's shipments, they said.
As of 11:24 a.m. Friday, shares of Largan had fallen 4.21 percent to NT$3,640.00 (US$118), off an early low of NT$3,425.00, with 1.72 million shares changing hands on the Taiwan Stock Exchange.
On the broader market, the weighted index was up 0.88 percent at 10.926.89 points.
Soon after the local equity market opened, Largan faced heavy selling as investors took cues from the company's September sales outlook the previous day.
However, the stock made a technical recovery as it moved closer to the NT$3,220,00 mark, an intraday low recorded on April 24, dealers said.
"I think the selling came largely from local institutional investors, in particular securities investment trust companies, which simply wanted to avoid losses," MasterLink Securities Tom Tang said.
On Thursday, Largan said its September sales might decline from August as global demand for the gadgets produced by some of its clients was lower than expected.
Not just Largan, but many other tech companies are being hurt by an ongoing trade war between the United States and China, according to Tang.
"Market sentiment toward global demand has turned cautious amid the escalating trade frictions between the U.S. and China, which could hurt the world's economy," he said.
Investors are also worried that Apple might not use triple camera lenses, which are produced primarily by Largan, for its next generation iPhones, Tang said, adding that such a decision would drag down the Taiwanese supplier's shipments in the future.
In August, Largan posted NT$5.51 billion in consolidated sales, a 4 percent increase from a month earlier and a 10 percent hike year-on-year, as the company entered its annual peak season.
Its August sales were the highest since November 2017, when they stood at NT$5.61 billion.
Source: Focus Taiwan News Channel