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Largan shares hit by concerns over new iPhone sales

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Largan shares hit by concerns over new iPhone sales

Taipei, Sept. 4 (CNA) Shares of Largan Precision Co., a smartphone camera lens supplier to Apple Inc., came under heavy pressure Friday after a research report raised concerns over sales of the next generation iPhone, which is expected to be unveiled on Sept. 9, dealers said.
The selling also reflected a decision by foreign brokerages to lower their target price on the stock amid uncertainty over the Taiwanese manufacturer's fourth-quarter shipments, despite the launch of the new iPhone, dealers said.
Largan shares fell 5.76 percent to close at NT$2,700.00 (US$82.82), with 1.34 million shares changing hands on the Taiwan Stock Exchange. The stock underperformed the weighted index on the main board which dropped 1.17 percent to 8,000.60.
After a mild technical rebound early Friday from a 2.88 percent fall on Thursday, the stock soon faced downward pressure in the wake of a research report by Taipei-based KGI Securities, dealers said.
KGI Securities analyst Kuo Ming-chi said that if the new Force Touch technology on the next-generation iPhone does not prove attractive to consumers, sales of the smartphone will remain the same or fall lower than those of its predecessors, the iPhone 6 and iPhone 6S.
The Force Touch technology will allow users to press harder on the display for new input methods such as a handwritten signature, a development that is seen likely to expand the use of smartphones in the business sector.
Kuo, who is known to have a good record in tracking Apple and its supply chain, said the next generation iPhone is unlikely to use sapphire camera lens covers, which have failed durability tests. Apple has reverted to ion-strengthened glass for its new smartphones, likely to be dubbed the iPhone 6s and 6s Plus, he said.
Since the beginning of the month, Largan shares have encountered selling in reflection of concerns over the new iPhone sales, and the pressure increased Friday in the wake of the KGI report.
Over the past four trading sessions, the stock has fallen about 10.6 percent but remains the most expensive on the local market. Investor sentiment has also been affect by the downgrade of Largan's target price by two foreign brokerages, dealers said.
One Asia-based brokerage has trimmed its target price on Largan shares from NT$3,900.00 to NT$3,326.00, forecasting a 6 percent sequential increase in the company's fourth-quarter sales and a 1 percent year-on-year rise, in view of slowing global demand for smartphones.
A European brokerage has also lowered its target price on Largan shares from NT$3,900 to NT$2,880.
Under Taiwan's regulations, the names of foreign brokerages cannot be reported when they give price forecasts for specific stocks. (By Han Ting-ting and Frances Huang)


Updated : 2021-09-26 09:47 GMT+08:00