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Largan shares fall below NT$5,000 amid iPhone X worries

2017/12/04 15:25:09

Taipei, Dec. 4 (CNA) Shares in Largan Precision Co., a smartphone camera lens supplier to Apple Inc., moved sharply lower and ended below the NT$5,000 (US$166) mark Monday amid lingering concerns over shipments of the premium iPhone X, one of the latest three iPhone models, dealers said.

The selling emerged after institutional investors stood on the sell side for the 17th consecutive session on Friday after concerns were raised over Largan's yield rates in its new production base in Taichung, they said.

Largan shares closed down 4.19 percent at NT$4,800.00 with 917,000 shares changing hands, underperforming the Taiwan Stock Exchange, where the weighted index ended up 0.48 percent, at 10,651.11 points.

It was the first time the stock closed below NT$5,000 since July 7, when its closing price stood at NT$4,960.00. The stock remained the most expensive on the local equity market.

In the early morning session, Largan shares fell and remained about the NT$5,000 level as the broader market traded in a narrow range. Downward pressure on the stock increased in the mid-morning session, causing its share price to fall well below that level and the weakness continued until the end of the session, dealers said.

"It seems some concerns over iPhone X sales have been on the rise, which prompted foreign institutional investors to take a cautious attitude toward Largan, one of the most important suppliers to Apple," Ta Ching Securities analyst Andy Hsu said.

"Glitches following an upgrade of iPhone's operating system have raised worries over iPhone sales, which dealt another blow to Largan shares throughout the session," Hsu said, referring to the news that an iOS upgrade caused screen-blackening and continual respringing.

In a research note released on Monday, a U.S. brokerage reduced its target price on Largan shares from NT$4,200 to NT$4,100 and left a "neutral" rating on the stock unchanged.

There has been speculation in the market that Largan has encountered technological bottlenecks in its new production lines in Taichung, which compromised sales growth momentum in November.

Over the weekend, Largan repeated that its sales for November are expected to stay little changed from October, but said its production lines are operating as previously planned.

Dealers said recent and continual institutional selling of the stock has made many investors more cautious about movements in Largan shares.

Friday was the 17th consecutive session the stock has faced net selling, with foreign and local institutional investors recording aggregate net sales of 176,000 Largan shares.

"However, I remain upbeat about Largan's competitiveness. So I expect when the stock falls below NT$5,000 mark, bargain hunters will turn active to pave the path for a rebound soon," Hsu said.

(By Han Ting-ting, Jeffery Wu and Frances Huang)