Foreign brokerages raise target prices on Largan shares

Taipei, Feb. 2 (CNA) Several foreign brokerages have raised their target prices on shares of Largan Precision Co. after the smartphone camera lens supplier reported solid fourth quarter results. Among the foreign brokerages, which are upbeat about Largan's earnings outlook, Goldman Sachs said that as the Taiwanese manufacturer reported better-than-expected earnings in the fourth quarter, the brokerage has upgraded its target price on Largan shares to NT$1,120 from NT$1,030. On Friday, shares of Largan gained 3.10 percent to close at NT$797.00 with 4.53 million shares changing hands on the Taiwan Stock Exchange after it released its fourth quarter results a day earlier. Foreign institutional investors served as net buyers of 367,120 shares. In the October-December period, Largan posted NT$2.87 billion in net profit, more than double its NT$1.16 billion net profit in the previous quarter, on the back of the popularity of Apple's iPhone, which uses Largan lenses. Apple accounted for an estimated 60 percent of Largan's total sales in the fourth quarter. Its earnings per share (EPS) in the last three months of 2012 stood at NT$21.39, up from NT$8.65 recorded in the third quarter, while consolidated sales rose 90 percent to NT$8.58 billion. Goldman said Largan's fourth quarter EPS was higher than the brokerage's estimate of NT$17.8 and also beat a market forecast of NT$17.00. Following the strong showing in the fourth quarter, Goldman has also raised its forecasts of Largan's EPS for 2013 and 2014 by 9 percent and 10 percent, respectively, to NT$65.27 and NT$79.99. For the whole of 2012, Largan posted NT$5.58 billion in net profit, or NT$41.58 in EPS. In 2011, its net income was NT$5.20 billion, or NT$38.19 per share. Its consolidated sales for 2012 totaled NT$20 billion, up more than 20 percent from a year earlier. In addition to an upgrade of its target price, Goldman has maintained a "buy" recommendation on Largan shares. CLSA Asia-Pacific Markets is also optimistic about Largan's bottom line, upgrading its forecasts for the manufacturer's EPS for 2013 and 2014 by 3 percent and 4 percent, respectively, to NT$59.80 and NT$68.50. CLSA has raised a target price on Largan shares to NT$960 from NT$920 and reiterated a "buy" recommendation on the stock. Also after its fourth quarter earnings, Nomura Securities has hiked a target price on Largan shares to NT$980 from NT$930 and maintaining a "buy" rating on the stock, while BNP Paribas has also raised its target price to NT$980 from NT$900 and maintained a "buy" recommendation. Merrill Lynch has upgraded its target price on Largan shares to NT$750 from NT$700 but has maintained an "underperforming" rating on the stock. (By Lo Hsiu-wen and Frances Huang)