Target price on Largan shares raised to NT$5,700

Taipei--A U.S.-based brokerage has raised its target price on shares in Taiwan-based smartphone camera lens supplier Largan Precision Co.(???) to NT$5,700 (US$186), the highest among foreign brokerages that follow the firm.

In a research note, the brokerage said that Largan, one of the most important suppliers to Apple Inc., is expected to benefit from the anticipated replacement of iPhones later in the year when the U.S. consumer electronics giant unveils the next generation iPhone which is expected to include significant upgrades.

Many market analysts said Apple is expected to adopt dual camera lenses for all its new iPhones, which will boost Largan's shipments.

Apple has equipped the larger iPhone 7 Plus, the latest model, with a dual lens camera but the smaller iPhone 7 has only a single lens camera. The market widely expects Apple to adopt dual lenses for all new models to be launched this year.

The U.S. brokerage, which has raised its target price on Largan shares from NT$5,000 to NT$5,700, said that the company accounts for almost 100 percent of dual lens supply to Apple on the back of its lead in dual lens development.

On Feb. 24, the last trading day before the four-day 228 Memorial Day holiday, Largan shares closed at NT$4,560.00 on the Taiwan Stock Exchange. Since the beginning of this year, shares in the firm have gained more than 20 percent on the back of foreign institutional buying amid optimism over its bottom line.

CNA cannot identify the brokerage because media outlets in Taiwan are not allowed to report the name of a foreign brokerage when it gives price forecasts for specific stocks.

In addition to being upbeat about upcoming iPhone sales, the U.S. brokerage said that Largan is expected to secure more orders from Chinese smartphone brands which are increasingly adopting dual lens cameras.

The brokerage said that several Chinese smartphone vendors such as Huawei Technologies (??) and OPPO, are expected to unveil new flagship models equipped with dual lenses at the Mobile World Congress set to open later Monday in Barcelona, and Largan is one of their major suppliers.

The brokerage said that Largan accounted for more than 80 percent of dual lens orders placed by Chinese smartphone vendors and it will be hard for any of its rivals to catch-up in the China market any time soon.

Meanwhile, Samsung Electronics Co. is expected to increase its orders from Largan as the South Korean smartphone brand also adopts dual lenses for its smartphones in the second half of this year, the brokerage said.

Due to an upbeat outlook for Largan, the brokerage has left an outperform recommendation on the stock unchanged.

Source: Focus Taiwan News Channel