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Shares of Largan extend gains on potential of sales to Apple

Shares of Largan extend gains on potential of sales to Apple

Taipei, June 24 (CNA) Shares of Largan Precision Co., which supplies smartphone camera lenses to Apple Inc., extended their momentum Wednesday morning after the stock hit a new closing high a day earlier, dealers said.
The buying largely reflected expectations that Apple will upgrade its camera equipment in the next-generation iPhone and place more orders with Largan, which specializes in high-end camera lens production, they said.
As of 10:55 a.m., shares of Largan had added 1.13 percent to NT$3,595.00 (US$116), with 420,000 shares changing hands, outperforming the broader market, after closing at a record high of NT$3,555.00 on Tuesday.
Largan remains the most expensive stock in the local market.
The weighted index on the Taiwan Stock Exchange (TWSE) was down 0.06 percent at 9,385.20.
"It seems that the market has reached a consensus that Largan will continue to ride the wave of an increase in Apple's orders, in particular after Apple unveils the next iPhones (likely in August or September)," MasterLink Securities analyst Tom Tang said.
"Largan has become one of the favorites of foreign institutional investors, and I think foreign institutional buying was behind the stock's rise today," Tang said.
According to the TWSE, foreign institutional investors owned a 48.9 percent stake in Largan as of Tuesday. "Foreign holdings in Largan are high because only institutional investors can afford such a high share price," Tang said.
A recent report posted by technology website mydrivers cited sources from Apple's supply chain as saying that the next-generation iPhone, which may be called the iPhone 6S, will use 12-megapexel camera lenses, an upgrade from the 8-megapixel lenses used in the latest iPhone 6 and iPhone 6 plus.
"If the report turns out to be true, Largan is expected to become the largest beneficiary as it has taken the lead over its peers in high-end camera lens production," Tang said. "It's a situation in which the winner takes all."
A U.S.-based brokerage said that after the launch of the new iPhones, Apple could ship 62 million iPhones, including 36 million iPhone 6S, in the third quarter of this year, up 15 percent from the second quarter, when iPhone shipments could fall 16 percent from the first quarter to 54 million units.
Analysts said Largan should benefit from Apple's efforts to build up inventory for production of the new iPhone in the third quarter, which should bolster the sales of suppliers such as Largan.
"Although Largan shares encountered some technical hurdles after the stock extended gains from yesterday, if foreign institutional investors continue to buy into the stock, it could overcome them," Tang said.
The stock hit an early high of NT$3,620.00 on Wednesday before retreating slightly. (By Han Ting-ting and Frances Huang)


Updated : 2021-05-15 14:35 GMT+08:00