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Largan shares keep falling on downgraded foreign brokerage rating

Largan shares keep falling on downgraded foreign brokerage rating

Taipei, July 8 (CNA) Shares of smartphone camera lens supplier Largan Precision Co., the most expensive stock in the local market, fell for the third consecutive session Wednesday after being downgraded by a foreign brokerage.
Largan, a major supplier to Apple Inc., shed 4.93 percent to close at NT$3,280 (US$105.61), while the weighted index on the Taiwan Stock Exchange ended down 274.05 points, or 2.96 percent, at 8,976.11.
The decrease in Largan shares came a day after a European brokerage downgraded its recommendation for the stock from "buy" to "neutral" and cut its price target from NT$3,800 to NT$3,400, citing slower-than-expected adoption of dual cameras and a smaller-than-expected camera lens upgrade for Apple's upcoming iPhone 6S.
The brokerage said that the current iPhone 6 has an 8-megapixel camera and already uses an advanced 5-plastic (5P) camera lens design, and it forecast that Apple is likely to also use the 5P lens design for the iPhone 6S camera.
Although the resolution of the iPhone 6S camera could be upgraded to 12 megapixels, the pixel size could shrink to 1.25-micrometers (um) from 1.5 um in the iPhone 6, the European brokerage said in a note to clients Tuesday.
"As a result, the overall sensor size could be the same, and the phone would not need a 6P lens to facilitate the adoption of a different sensor," said the brokerage, the name of which cannot be reported because it was offering specific forecasts that could influence the market.
In another research note released Tuesday, a U.S.-based brokerage maintained its stock rating of "equal weight" on Largan shares and raised its price target from NT$2,585 to NT$3,232, reflecting the brokerage's higher estimates for Largan's earnings per share from 2015 to 2017.
While Largan's dominant position is no longer in question, the U.S. brokerage firm said that a key issue is whether dual camera adoption from 2016 can continue to support robust earnings growth for Largan amid decelerating smartphone demand. (By Jeffrey Wu)


Updated : 2021-09-21 05:12 GMT+08:00