Largan Precision initiates treasury stock buyback of 2.67 million shares, investing hundreds of billions to address operational pressures

Domestic optical lens leader Largan Precision (3008) is facing operational challenges. On December 19, the board of directors approved a share repurchase plan, with an estimated investment of NT$179.7 billion. Starting from December 22, the company will gradually buy back 2.67 million shares, approximately 2% of the total issued shares, to stabilize the stock price and protect shareholder interests. This marks the company’s second share repurchase since 2021, ending a four-year hiatus.

Revenue Decline as a Key Factor

Largan reported consolidated revenue of NT$5.303 billion in November, a 16% decrease month-over-month and a 12% decrease year-over-year, hitting a five-month low. The company estimates December performance will be similar to November, with Q4 revenue expected to approach NT$17 billion, facing both quarterly and annual declines. Although cumulative revenue for the first 11 months of this year still grew 3% compared to the same period last year, the full capacity utilization is not due to increased orders but rather due to higher process complexity.

Gross margin in the third quarter fell to 47.2%, the lowest in nearly eight quarters, affected by exchange rate fluctuations, increased proportion of outsourced components, and yield issues with new products. Since November, operational momentum has clearly weakened, exerting tangible pressure on the stock price.

Share Repurchase Period and Price Range

The share repurchase will be carried out from December 19 until February 11 of the following year. The company will buy back 2.67 million shares in batches on the open market, with a purchase price range set between NT$1,600 and NT$3,200 per share. Notably, the company has not set a strict lower stop-loss point; even if the stock price falls below NT$1,600, the buyback will continue, demonstrating firm determination to support the stock price. Based on the exchange rate, NT$1,600 is roughly near the lower end of this range, reflecting the company’s serious attitude toward price support.

Historical Comparison and Market Observation

This is Largan’s second share repurchase in history. The previous one was from October to December 2021, with an initial plan to buy back 1.342 million shares. Ultimately, about 672,000 shares were repurchased, a 50% execution rate, totaling approximately NT$1.4 billion, with an average buyback price of NT$2,085.63 per share.

Compared to the previous action, this time the company is not only expanding the scale of buybacks (from 1.342 million to 2.67 million shares) but also significantly increasing the fund amount from NT$1.4 billion to NT$179.7 billion, indicating more substantial market pressure. The execution of this share repurchase and its actual support effect on the stock price will be key focus points for the market moving forward.

Largan’s stock opened at NT$2,035 and closed at NT$2,060, up 1.48% for the day.