Adam Lin, Largan's chief executive in a press conference after the company's annual general meeting clearly stated that "We will have lenses for 3-D sensing module used in smartphone ready to ship in the second half this year." The Nikkei report added that the 3-D sensors enable facial and iris recognition.
Lin did not specify that the lenses for 3-D sensing modules were ordered by Apple. But Jeff Pu, an analyst at Yuanta Investment Consulting, said that the U.S. company would be the only one in the world that would release smartphones with the advanced feature this year.
Pu estimated that Largan would supply 90% of rear camera lenses for iPhones, around 50% of 3-D sensing lenses, and up to 30% of the front camera lenses. Taiwanese rival Genius Electronics Optical and Japan's Kantatsu, controlled by Hon Hai Precision Industry, compete for the rest of the iPhone orders.
Some market watchers had earlier said that Apple might decide not to adopt 3-D sensing features this year due to quality issues.
Earlier today Barron's posted a report titled "Apple: Production Estimates Going Higher for iPhone, Says Credit Suisse."
Agents fear for their role in commercial property market
Larger groups adapt to avoid falling victim to the tech-enabled removal of middlemen
Since at least the mid-1800s, London-based commercial estate agents have sat at the centre of most UK property and land deals.
But many of the largest agents are now having to adapt their business models for fear they could fall victim to a technology-enabled removal of the middleman, a trend that has already reshaped consumer industries such as retail.
On the one hand, there are shared workspace groups such as New York-based WeWork, which last week unveiled plans for its largest location globally, with a deal to lease 280,000 square feet on London’s South Bank. Using apps to market flexible offices, they have cut agents out of smaller leasing deals. On the other hand, multibillion-pound landlords are bringing functions in-house for which they once relied on agents.
The resulting pincer movement has prompted the largest UK and US agents to shift focus to long-term advisory income as they anticipate a reduction in one-off deal fees.
“We are facing the impact of a fourth industrial revolution,” says John Forrester, chief executive for the Europe, Middle East and Africa region at Cushman & Wakefield, the Chicago-based real estate services group.
“There has been a surge of energy in the past 12 months, but we need to make up for 10 years in which we [the industry] were asleep at the wheel.”
Cushman this year set up a “transformation team” in the region to deal with disruption. Mr Forrester says the removal of the middleman from parts of the market has already begun.
“Two years ago, [the serviced office group] Regus were paying us to deal with them. Now, we are seeing business-to-business [office leasing] deals without intermediation.”
Chris Lewis, director and head of office agency and consulting at DeVono Cresa, says: “Five to 10 years ago, if a company had a requirement for 150 people for two years, they would speak to their real estate adviser. Now they can go to The Office Group, WeWork, or an intermediary such as Instant Offices.”
Such deals would previously have earned agents a fee of about 10 per cent of one year’s rent, he says. In a parallel shift, services such as Appear Here, a digital market for pop-up shops, are taking over some small retail leasing deals.
When it comes to bigger transactions, the threat comes from large landlords — the likes of Blackstone and British Land — which are now handling functions once carried out by external agents, says Simon Prichard, senior partner at Gerald Eve, a London agency.
“To justify their fees, property managers need to show they’re doing something. They’ve taken away from agents what agents used to do,” he says. For example, he says, in-house leasing teams handle marketing campaigns, attend meetings with lawyers and agree terms with tenants, although agents are able to provide the all-important contacts.
Commercial property sales have not yet moved online, but digital offerings in the residential market are forcing established agents there to change their models, offering a clue to how the commercial market may change.
Agents emphasise that the big-ticket leasing and investment deals that provide a significant chunk of their income do not appear to be at risk.
“We don’t believe there is going to be wholesale disintermediation of the sector, as there has been in some others,” says Bob Sulentic, global chief executive of CBRE, the largest group in the sector worldwide.
Andrew Miles, co-founder of Realla, a search engine for commercial property, says: “Agents need to think about what they do that adds value. Armies of grads creating brochures doesn’t really add value. Running a complex transaction on behalf of a major property company does — and you won’t be able to do that with artificial intelligence.”
In the UK, the market shock that followed last year’s vote to leave the EU served as a reminder of the pain that can result from a drop in transaction fees. For example, Chicago-based JLL in February reported that a decline in annual profits “was primarily UK-focused and driven by the decline in capital markets transaction volumes [amounting to] nearly $35m of capital markets performance fees earned in 2015 that did not recur in 2016”.
Agencies have been quietly shifting into areas such as property management, which entail long-term contracts rather than one-off fees. Over the past two years Savills, the London-listed agency, has acquired Collier & Madge, managers of commercial properties; Chainbow, which manages residential blocks; and Smith & Gore, which specialises in rural estate management.
CBRE, meanwhile, said in its annual results that it “continued to shift toward more recurring revenue in 2016”, increasing such fees to 42 per cent from 37 per cent of its total.
Nabarro, a law firm, says agents are “seeking to move up the food chain by providing complex financial advice, which has traditionally been the territory of investment banks”. CBRE and JLL, for example, have corporate finance teams.
Mr Lewis, however, says agents’ role in broking deals will survive — if only because companies’ property directors will always want to share responsibility.
“For corporates and for landlords, if anyone ever says ‘we want to look at this deal and see how you got to this point’, it’s good to be able to point at a third party who has given you advice and support rather than take it all on yourself.”
Gapping down
In reaction to disappointing earnings/guidance:
In reaction to disappointing earnings/guidance:
- BPMX -7.7%, TAX -5%, LEJU -2.1%
Other news:
- ALDX -25.5% (light volume; to host a conference call and webcast on Wednesday, June 14, 2017 at 8:00 A.M. EDT to discuss results from its Phase 2b Allergic Conjunctivitis Trial)
- SQNS -5.7% (to offer newly issued American Depositary Shares, representing ordinary shares, in an underwritten public offering)
- WLL -2.8% (pulling back after closing near highs)
- MRO -2% (following API data and IEA report)
- SNCR -1.9% (light volume; independent registered public accounting firm concluded that previously issued financial statements for 2015/2016 fiscal years and the respective quarterly periods should be restated and should no longer be relied upon)
- KMDA -1.9% (slightly pulling back following recent strength in stock)
- BIIB -1.5% (CFO Paul Clancy to depart)
Analyst comments:
- HA -3.7% (downgraded to Sell at Stifel)
- FIVE -0.8% (downgraded to Sector Weight from Overweight at KeyBanc Capital Mkts)
- SBUX -0.8% (downgraded to Neutral from Outperform at Wedbush)
- APC -0.5% (downgraded to Underweight from Equal Weight at Barclays)
Gapping up
In reaction to strong earnings/guidance:
In reaction to strong earnings/guidance:
- HRB +10.2%, BTI +0.8%, CPST +0.7%, CCE +0.7%, (reaffirmed outlook)
M&A news:
- BKD +11.2% (Zhonghong Zhuoye Group is getting closer to deal to acquire BKD, according to FT)
Other news:
- MBOT +12.8% (granted U.S. patent which covers a device for the prevention of shunt stenosis)
- SOL +7.9% (received a prelim proposal from Chairman and CEO Xianshou Li to acquire the co's manufacturing and LED distribution businesses and assume related indebtedness)
- ABIL +7.9% (stock continues to be volatile in pre-mkt activity)
- MVIS +7.1% (Microvision terminates at-the-market facility with IFS Securities)
- ALXN +4.5% (confirms it named BIIB's CFO Paul Clancy as its CFO effective July 31)
- BTX +3.8% (reports that, based on the analysis of top line data, the Renevia pivotal trial in Europe has met its primary endpoint)
- BLFS +3.5% (enters into a a supply agreement w/ Adaptimmune Therapeutics (ADAP))
- GNMK +2.2% (prices 6,382,978 shares of its common stock at $11.75 per share)
- EMR +0.9% (favorable commentary on last night's Mad Money)
- TSLA +0.9% (continued strength)
- WDC +0.9% (continued strength)
Analyst comments:
- NDRM +4.4% (upgraded to Outperform from Perform at Oppenheimer)
- QSR +1.1% (upgraded to Outperform from Perform at Oppenheimer)
- NVDA +0.7% (target raised to $171 from $165 at Goldman)
- MU +0.5% (Credit Suisse sees upside for May and August quarters)
"Now that Uber doesn't have a CEO, COO, CTO, or CFO, I guess this is the closest it's ever been to a self-driving car company"
York Capital Names Two Eventual Successors for Founder Jamie Dinan
The nearly $17 billion firm named Bill Vrattos and Christophe Aurand its future leaders
Jamie Dinan has named two successors to lead his hedge-fund firm York Capital Management in the future.
The nearly $17 billion firm named Bill Vrattos and Christophe Aurand its future leaders and promoted them to co-chief investment officers, effective July 1. They have respectively led York’s debt and European funds for years. Mr. Aurand also assumed more responsibility for York’s flagship multistrategy fund in 2016.
York also named its chief investment officer Dan Schwartz to co-chief executive with Mr. Dinan.
“Bill and Christophe are outstanding long-term investors who have been instrumental to the Firm’s investment success,” Messrs. Dinan and Schwartz wrote in a letter to investors May 17. “We embrace them as core members of York’s senior leadership team and as our future successors in managing our firm.”
The letter said that despite the change at the top, portfolio management for York’s funds wouldn’t change.
York previously described Mr. Vrattos, Mr. Aurand and a former partner, Michael Weinberger, as the next generation to lead the New York firm, according to investors. Mr. Weinberger left early last year to start his own hedge fund.
Mr. Aurand had threatened to leave the firm in the recent past, according to a May report by the website Dealbreaker. Some investors said an exit by Mr. Aurand would have been concerning.
Weak performance and investor defections have broadly pressured York. Its assets under management shrank from $26 billion in 2015 to $17 billion last year, leading to efforts by Mr. Dinan to staunch outflows. Its funds have posted strong returns this year.
York’s flagship fund bets on deals and other corporate changes around the world and gained 13% for the year through May, according to a person familiar with the matter. That outstripped its benchmark the S&P 500, which gained 8.7% for the same period, including dividends. Investors in that fund remain under the fund’s high-water mark, or the point at which investment gains make up for losses. A person familiar with York said most of the money invested in the firm is above its high-water mark.
Mr. Aurand’s European Opportunities Fund was up was up 10% for the same period while Mr. Vrattos’s bond fund was up more than 5%, roughly on par with their benchmarks.
York sold a 30% stake to Credit Suisse Group AG in 2010. Some investment staffers had their contracts locked-in following the deal, with several of these employees departing as their lock-up periods expired, investors said. Those terms ranged between five years and ten years, according to people familiar with the matter.