Sev­eral for­eign bro­ker­ages hike tar­get prices on pos­i­tive Lar­gan shares

The China Post - - LOCAL -

Sev­eral for­eign bro­ker­ages have raised their tar­get prices on shares of Lar­gan Pre­ci­sion Co. (

) af­ter the smart­phone cam­era lens sup­plier re­ported a higher- than- ex­pected gross mar­gin for the first quar­ter of this year.

Credit Suisse is one of the for­eign bro­ker­ages which have been up­beat about Lar­gan’s earn­ings prospects. Credit Suisse said that Lar­gan will con­tinue to take ad- van­tage of its lead over its peers in high-end cam­era lens pro­duc­tion tech­nol­ogy to se­cure a high gross mar­gin.

The Euro­pean bro­ker­age has raised a tar­get price on Lar­gan shares to NT$ 3,280 ( US$ 105) from NT$2,940, while leav­ing an “out­per­form” rat­ing on the stock.

Af­ter the smart­phone cam­era lens sup­plier re­leased its first quar­ter re­sults Thurs­day, shares of Lar­gan rose 0.90 per­cent to close at NT$2,810.00 Fri­day, out­per­form­ing the broader mar­ket, which ended down 0.88 per­cent.

Lar­gan an­nounced a first quar­ter gross mar­gin of 56.7 per­cent, up about 6 per­cent­age points from the pre­vi­ous quar­ter, beat­ing mar­ket ex­pec­ta­tions. Mar­ket an­a­lysts said that Lar­gan has ben­e­fited from an im­prove­ment in its prod­uct port­fo­lio.

In the first quar­ter, Lar­gan posted NT$32.86 in earn­ings per share (EPS) for the first quar­ter of this year, also beat­ing an ear­lier mar­ket es­ti­mate. The first quar­ter fig­ure rose from NT$22.36 recorded in the same pe­riod last year, while it fell from NT$55.4 reg­is­tered in the pre­vi­ous quar­ter due to slow sea­son ef­fects.

Ex­pect­ing that Lar­gan will be able to main­tain a high gross mar­gin, Credit Suisse has raised its fore­cast of the smart­phone cam­era lens maker’s earn­ings per share by 4 per­cent and 14 per­cent in 2015 and 2016, re­spec­tively, to NT$ 162 and NT$194. In 2014, its EPS stood at NT$144.85.

Bar­clays Cap­i­tal has also raised its fore­cast of Lar­gan’s EPS for 2015 and 2016 by 3 per­cent and 10 per­cent, re­spec­tively, to NT$ 164.18 and NT$ 212.55 amid sim­i­lar op­ti­mism to­ward the smart­phone cam­era lens maker.

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