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Largan shares plunge on caution about December sales

2017/12/06 14:35:20

Taipei, Dec. 6 (CNA) Shares of Largan Precision Co., a smartphone camera lens supplier to Apple Inc., took a beating Wednesday after it gave a pessimistic forecast for December sales, dealers said.

The selling, which was also prompted by the company's flat sales in November from a month earlier, also spread to other "Apple concept stocks" amid lingering worries over shipments of the latest iPhones unveiled in September, they said.

Pulled down by these Taiwanese Apple suppliers, the benchmark index on the Taiwan stock exchange, the Taiex, continued its slide from a day earlier to plunge below the 10,400-point mark at the close, dealers said.

Largan, the Taiwan stock market's most expensive stock, closed down 9.83 percent at NT$4,265 (US$142), with 3.05 million shares changing hands on the Taiwan Stock Exchange, where the Taiex finished 1.64 percent lower at 10,393.92.

The stock opened down more than 6 percent and was down by the maximum allowed daily decline of 10 percent to NT$4,260 at 10:30 a.m. before rebounding by more than NT$100 on bargain-hunting just after noon only to collapse in the final minute of trading.

"The bargain hunting was simply for trading purposes. As Largan has been haunted by sales worries, it remains to be seen when the stock will stage a meaningful rebound and return to an uptrend," Hua Nan Securities analyst Henry Miao said.

In a statement released on Tuesday, Largan said its consolidated sales for November rose 0.05 percent from a month earlier to NT$5.62 billion, but with the premium iPhone X going on sale on Nov. 3, expectations had been for higher growth.

Largan is believed to be a supplier of the camera lens for the iPhone X, the signature model released on the iPhone's 10th anniversary.

In November, 10-megapixel lenses or more advanced devices accounted for 60-70 percent of Largan's total sales, down from 70-80 percent seen in October, indicating demand for high-end lenses was on the decline, dealers said.

Largan also said that because its major clients are slowing down the pace at which they are placing new orders, it expected its sales in December to be lower than in November.

"Largan's caution about its December sales has raised worries about the new iPhone's shipments in the fourth quarter and even in the first quarter of 2018. It was no surprise that investors rushed to dump the stock soon after the market opened," Miao said.

Largan shares closed below the NT$5,000 mark on Dec. 1 for the first time since July 7 in the wake of new iPhone shipment worries.

The stock has fallen 29 percent since Nov. 3, when it closed at its highest level ever at NT$5,985.

New iPhone shipment concerns also affected other Apple suppliers such as metal casing maker Catcher Technology Co., which also released its November sales report on Tuesday.

Catcher shares fell 6.33 percent to close at NT$311.00 on trading volume of 8.53 million shares after the company said its November sales fell 10.4 percent from a month earlier to NT$11.10 billion.

Despite the month-on-month fall in sales, Catcher said it expected its sales growth momentum will remain strong in the fourth quarter, noting that the November sales figure was up 35.3 percent from the same month a year earlier.

"However, investors still punished the stock today. Its smaller decline than Largan's was just because its valuation was lower than Largan's," Miao said.

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