Largan to pay workers NT$4.095bn in bonuses

SHARP RIVALRY?A newspaper reported that a unit of Japan’s Sharp Corp is planning to expand production to supply camera lenses to Apple Inc for new iPhones

Staff writer, with CNA

Largan Precision Co (大立光), a smartphone camera lens supplier to Apple Inc, is to award its employees a large annual bonus on the back of the company’s strong bottom line.

A board meeting approved a proposal to issue a total of NT$4.095 billion (US$132.2 million) in annual bonuses to 4,600 employees, meaning each would receive almost NT$900,000 on average.

The decision makes Largan one of the most generous employers in the nation after it posted earnings per share (EPS) of NT$169.40 for last year, the highest of any listed company in Taiwan.

Last month, Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest contract chipmaker, announced it would issue an average of NT$1.07 million in bonuses after posting the company’s highest-ever annual net profit of NT$334.25 billion and record-high sales of NT$947.94 billion for last year.

Largan’s average employee bonus was less than the NT$950,000 last year, as its EPS for last year was less than the NT$180.08 in 2015, but the bonus remains among the highest nationwide at a time when Taiwan is experiencing long-term wage stagnation.

Last year, Largan’s net income fell about 6 percent from a year earlier to NT$22.72 billion on slower global demand.

The company is scheduled to issue employee bonuses in September.

Due to the lower earnings for last year, Largan said compensation paid to its directors and supervisors would fall from NT$3.27 billion last year to NT$3.07 billion this year.

Largan has benefited from its lead over competitors in high-end camera lens production, in particular dual camera lenses.

As more international smartphone brands, including Apple and Chinese vendors, adopt dual camera lenses in their devices, the market widely expects Largan’s profits to improve this year.

A US-based brokerage raised its target price on Largan shares from NT$5,000 to NT$5,700, the highest among foreign brokerages tracking the stock.

On Monday, Largan closed up 3.2 percent at NT$4,650 to remain the most expensive stock on the local market.

However, local media cited the Nikkei Shimbun as reporting yesterday that Largan is likely to be challenged by Japan’s Sharp Corp — in which Hon Hai Precision Industry Co (鴻海精密) owns a 66 percent stake — as the Japanese firm’s subsidiary Kantatsu Co is planning to expand smartphone camera lens production capacity in China.

The report said that Kantatsu’s new production lines, which are to be based in Jiangsu Province, are scheduled to start operations next year with the aim of supplying smartphone camera lenses to Apple for new iPhones.

Sharp has raised its stake in Kantatsu from 18 percent to 44 percent since mid-January.