Taipei, Shares of Taiwan-based Largan Precision Co., a smartphone camera lens supplier to Apple Inc., moved sharply higher Monday morning as the company raised its sales outlook for May based on its better-than-expected results the previous month, dealers said.
Led by Largan, other "Apple concept" stocks, such as iPhone assembler Hon Hai Precision Industry Co. also attracted buying, which pushed up the broader market as bargain hunters took advantage of the recent selling in the bellwether electronics sector, dealers said.
As of 10:57 a.m., shares of Largan, the most expensive stock on the local market, had climbed 9.75 percent to NT$3,995 (US$134.5), with 1.63 million shares changing hands on the Taiwan Stock Exchange. The benchmark weighted index was up 0.67 percent at 10,599.47 points.
Largan shares got a significant boost soon after the equity market opened as investors took cues from the company's April sales report and its May revenue outlook, which was revised over the weekend, dealers said.
"The stock had been hammered by foreign institutional investors in recent sessions amid worry over slower-than-expected sales of the signature iPhone X," MasterLink Securities analyst Tom Tang said.
"Now it seems the iPhone X sales concerns have been factored into Largan's share price and investors are looking at the company's April sales and its better May forecast," he said.
Noting that the Monday turnover was high, Tang said the buying appeared to be coming largely from foreign institutional investors, who were again increasing their holdings in the stock after a recent downward adjustment.
On Saturday, Largan said it recorded NT$3.47 billion in consolidated sales in April, up 10 percent from the previous month but down 6 percent from a year earlier. The monthly growth beat an earlier market forecast of a 3-5 percent increase.
The company attributed the increase to an improvement in its yield rate, which boosted its shipments in April.
Since there is room for a higher yield rate, Largan said, it was expecting monthly sales growth in May instead of a flat performance as it had previously projected.
In April, 10 megapixel and more advanced lenses, which command a higher profit margin, accounted for 70-80 percent of Largan's total sales, 8 megapixel lenses made up 10-20 percent, and 5 megapixel lenses represented up to 10 percent, according to the report.
In the first four month of the year, Largan's consolidated sales stood at NT$12.35 billion, down 15 percent from a year earlier.
Tang said buying in Largan on Monday spread to other Apple suppliers, with shares of Hon Hai up 1.62 percent at NT$81.70 as of 10:57 a.m.
Shares of metal casing maker Catcher Technology Co. had climbed 5.36 percent to NT$334.00 after the company reported over the weekend that its April sales were NT$6.6 billion, up 1.3 percent from the previous month and up 28.5 percent from a year earlier.
In the first four months of the year, Catcher's consolidated sales rose 37 percent from a year earlier to NT$27 billion.
In the first quarter, Catcher said, its net profit grew 75 percent from a year earlier to NT$3.66 billion, with its earnings per share at NT$4.75, compared with NT$2.71 a year earlier.
Source: Focus Taiwan News Channel