Lar­gan stock takes down­turn, shares slide be­low NT$3,000

The China Post - - LOCAL -

Shares of smart­phone cam­era lens maker Lar­gan Pre­ci­sion Co. ( ), one of the most im­por­tant sup­pli­ers to Ap­ple Inc., came un­der pres­sure to fall be­low the NT$3,000 mark Thurs­day morn­ing af­ter the com­pany gave a cau­tious out­look for Au­gust, deal­ers said.

As Lar­gan is the most ex­pen­sive stock in the lo­cal mar­ket, the firm’s down­turn hurt mar­ket sen­ti­ment, send­ing the broader mar­ket lower, the deal­ers said.

The lo­cal main board fell into neg­a­tive ter­ri­tory from its ear­lier gains.

As of 11:01 a.m., shares of Lar­gan had lost 6.95 per­cent to NT$2,810.00 (US$88.64), with 1.28 mil­lion shares chang­ing hands. The weighted in­dex on the Tai­wan Stock Ex­change was down 0.67 per­cent at 8,484.97 points, off an early high of 8,586.24.

“With in­vestor con­fi­dence re­main­ing weak, any neg­a­tive leads, like Lar­gan’s down­grade of its Au­gust sales out­look, have been am­pli­fied, ham­mer­ing its share price soon af­ter the lo­cal bourse opened,” MasterLink Se­cu­ri­ties an­a­lyst Tom Tang said.

“As Lar­gan is a high-priced stock, I think that the cur­rent selling largely came from for­eign in­sti­tu­tional in­vestors,” Tang said.

Lar­gan said a day ear­lier that its sales for Au­gust are ex­pected to stay lit­tle changed from July, rep­re­sent­ing a cau­tious tone com­pared with its pre­vi­ous forecast that its Au­gust sales will sur­pass the July fig­ure.

De­pend on Next Gen­er­a­tion

iPhone

“As one of the Ap­ple con­cept stocks, Lar­gan will no doubt de­pend on the next gen­er­a­tion of the iPhone to boost its sales for the sec­ond half of this year,” Tang said. “The cau­tion about Au­gust’s sales raised con­cerns over the next iPhone ship­ments at a time when global de­mand for high-tech gad­gets is on the de­cline.”

“There are also fears that the next iPhones will not boast a sig­nif­i­cant de­sign dif­fer­ence com­pared with the latest iPhone 6 and iPhone 6 Plus. Un­der such cir­cum­stances, in­vestors have kept alert over a pos­si­bil­ity that the next de­vice will un­der­per­form its pre­de­ces­sors,” Tang said.

In July, Lar­gan posted NT$5.26 bil­lion in con­sol­i­dated sales, up 3 per­cent from a month ear­lier and also up 49 per­cent from a year ear­lier. The July fig­ure was the high­est so far this year.

“Its July sales data is good. But in­vestors want a much bet­ter fig­ure in Au­gust, so its down­grade in the Au­gust out­look placed heavy down­ward pres­sure on Lar­gan shares, and in turn, a weaker Lar­gan prompted many in­vestors to un­load other stocks and drag down the en­tire mar­ket,” Tang said.

Catcher

Also on the lo­cal main board, shares of Catcher Tech­nol­ogy Co. ( ), another im­por­tant Ap­ple con­cept stock, re­mained re­silient, up 0.59 per­cent at NT$341.00 af­ter the me­tal casing maker reaf­firmed that its sales growth mo­men­tum will pick up quar­ter by quar­ter in the sec­ond half of this year.

“Ap­ple ac­counts for about only 40 per­cent of Catcher’s to­tal sales, while the U.S. firm makes up 60-70 per­cent of Lar­gan’s. So Catcher’s share price re­mained above the pre­vi­ous clos­ing level de­spite wor­ries about sales of the next iPhone this morn­ing,” Tang said.

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