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Author: YiStock   |   Latest post: Thu, 6 Dec 2018, 11:36 AM

 

INARI - Largan Precision Latest Result Suggesting Iphone Is Doing Fine - YiStock

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I have been waiting for Apple's main vendor to release their earning to further judge if Iphone is GREAT or BREAK.

Finally, the Largan Precision has released it November 2018 Revenue.

 

 

As usual, the killing type news title. Else who will want to read news. Right?

Let dig deeper. 

AS USUAL, THIS IS MY OWN BOLD GUESSTIMATE and PLEASE READ FOR FUN ONLY!!!

 

LARGAN PRECISION

- COMPANY BACKGROUND

Founded in 1987 by Scott Lin, Largan Precision is the world's leading manufacturer of smartphone camera lenses, supplying components to Apple and major Chinese cellphone makers. The company was listed on the Taiwan Stock Exchange in 2002. 

Let look at numbers.

Above table show largan precision's Revenue Cycle. The company will go through 6 months of high volume loading from July to December. Year in Year out the cycle remain the same.

The 6 months high volume loading period gave away total Revenue as per below:

2H FY 2016 -  NT$ 30,036,957 or Average NT$ 5,006,159 per month

2H FY 2017 - NT$ 31,006,512 or Average NT$ 5,167,752 per month

Now, Let See below for FY 2018.

 

Key Interpretation:

(1) It seems like the frontloading has actually occured in May 2018 instead of Jun 2018. 

(2) Let use May 18 to Oct 18 as 6 month high loading guide (instead of Jun to Dec), total Revenue stood at NT$30,391,091 or AVERAGE NT$ 5,065,182. Compared to FY 2017, the number has reduced by 1.98%. Compared to FY 2016, the number has increased by 1.2%

(3) Let use May 18 to Nov 18 as 7 month high loading guide, total Revenue stood at 34,399,091 or AVERAGE NT$ 4,914,155. Compared to FY 2017, the number has reduced by 4.9%. Compared to FY 2016, the number has reduced by 1.8%.

 

My Thoughts:

(1) By now everyone should know that Apple has excess inventory (high loading) in FY 2017. Therefore, i suppose FY 2018 revenue decrease of 1.98% (6 months) is really not alarming.

(2) Not to forget that Apple has further cut Largan Precision volume and allocated more volume of REAR camera for GeniuS Electronic Optical Co., Ltd. 

(3) Genius Electronic traditionally supply part of the facecamera (front camera) for Iphone. For FY 2018, the company managed to get order for the Rear facing camera and hence Largan Precision volume is cut. With that, I doubt the 1.98% (6 months average) or 4.9% (7 months average) is significant.

 

(4) Since Iphone 7 launched in 2016, Apple has already use 12 MP (12 x million) rear facing camera. The 12 MP camera has goes into Iphone7, 7 plus, 8, 8 plus, iphone X, XS, Xs Max & Xr.

Based on the information provided by largan precision, the revenue of camera above 10 MP has grown to 60% to 70% compared to October of 50% to 60%. When 10 MP phones has increased 10%, this means that those lower than 10 MP actually suffered contraction (small branded / no branded smart phones?)

The slight drop of revenue is HIGHLY UNLIKELY  DUE TO APPLE because since iphone 7, apple has already use 12 MP camera.

 

 

Conclusion:

(1) Althought Largan Precision has given away some market share to Genius Electronic Optical, the revenue does not seem to impact much. Iphone XS and Iphone Xs Max seems doing very well.

(2) Broadcom share some similarity to Largan Precision where it losses the Iphone Xr market share (2x 2 MIMO phone, slower speed) to Qorvo. Market has reacted to poor iphone Xr sales on Inari. But i suppose poor iphone Xr sales reflected high acceptance of iphone Xs / Xs max, which is actually good news to Inari. Market is hard to please.

(3) Inari recent guidance has highligted RF segment will continue to grow at normal pace due to higher RF content in new launched iphone. 

(4) The above result by largan precision has somehow shows that many china branded phones (below 10 MP) are actually not doing well. Does this indicate that people actually buy more high end phones?

 

Cheers,

YiStock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Chart Stock Name Last Change Volume 
INARI 2.04 +0.03 (1.49%) 29,438,400 

  3 people like this.
 
YiStock https://www.reuters.com/article/us-broadcom-results/broadcom-earnings-beat-on-strong-demand-for-data-center-products-idUSKBN1O52I0
07/12/2018 8:03 AM
YiStock We benefited from upside volumes of legacy phone generations at our North American OEM customer,” Tan said.
07/12/2018 8:04 AM
probability https://asia.nikkei.com/Opinion/China-and-US-should-defuse-Huawei-affair

The U.S. fears Chinese companies like Huawei and ZTE are instruments of Chinese influence, if not spying. Such suspicions are legitimate. Huawei, which now rivals Apple as a leading telecoms provider, has invested heavily in 5G and seeks to be a world leader. Washington has lobbied its allies, particularly its "Five Eyes" intelligence-sharing partners (U.K., Canada, Australia, New Zealand). All except Canada have rejected Huawei 5G technology, and there is pressure on Ottawa to join them. Japan, which plans a 5G rollout for the 2020 Olympics is also leaning in that direction. Though Portugal has signed up with Huawei for 5G, Germany and other European nations are becoming skeptical.
07/12/2018 6:43 PM


 

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