Largan reports high growth for fourth quarter, 2012 performance

By Ted Chen, The China Post

TAIPEI, Taiwan — Largan Precision Co. (大立光電), yesterday announced its fourth-quarter and 2012 performance results, with revenues growing 114 and 26 percent year-on-year basis, respectively.

The company’s fourth-quarter revenues reached NT$8.583 billion, yielding net income of NT$2.869 billion at a profit margin of 45 percent, and earnings per share (EPS) of NT$21.39. For 2012 the company’s total revenues reached NT$20.072 billion, yielding a net income of NT$5.577 billion, with EPS at NT$41.58. Largan is a leading producer and designer of optical lenses for a variety of applications. It has benefited from the rising popularity of smartphones, which are equipped with cameras. Many of the company’s major clients are prominent smartphone makers including, Apple, HTC, BlackBerry and Nokia, as well as Chinese handset makers Huawei Technologies Co. (華為) and ZTE Corp. (中興).

However, the company was recently hit by waning demand for Apple’s latest handset, which is also its largest customer.

The company anticipates performance to dip in the first two quarters of the year, citing traditional cyclical fluctuations.

However, the company thus far has been able to maintain a relatively high average selling price (ASP) for its components, as product specification requirements escalate and migrate toward the high end. This trend is most notable with optic modules of 10 megapixels and above.

The company is poised to begin production on components with wider apertures and higher mega pixel counts. This is likely purposed for the iPhone 5S that rumors suggest will be launched in July, according to CLSA-Asia Pacific analyst C.K. Cheng (鄭兆剛). Industry observers also anticipate that Largan will benefit from upward migration in the hardware specifications of China’s leading handset makers Huawei and ZTE. The company however declined to comment on the details of its clients but stated that their capacity and yield rates are sufficient in meeting the demands of the market.