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