Tue, Nov 13, 2007 - Page 12 News List

Hon Hai Precision reports record October revenues

ELECTRONIC EXPECTATIONS The firm said last month's non-consolidated sales were 14 percent higher than September's and that growth would continue this month


Hon Hai Precision Industry Co (鴻海精密) yesterday reported record high revenues last month as it started shipping new products to customers such as Sony Corp for its PS3 game consoles.

The nation's top electronics maker said non-consolidated sales grew 43.37 percent year-on-year to NT$131.17 billion (US$4.06 billion) last month from NT$88.77 billion a year earlier. Last month's figures represented about a 14 percent increase from September.

For the first 10 months of this year, Hon Hai registered NT$953.92 billion in revenues, an increase of almost 40 percent from about NT$681 billion in the same period last year.

"We believe that the strong year-on-year growth momentum in October was due to a gain in market share in the PC segment and the start of the Sony PS3 assembly," said Vincent Chen (陳豊丰), who tracks hardware electronics industry for CLSA Ltd's (里昂證券) Taipei branch. "October revenues are still solid."

Hon Hai generated 40 percent to 45 percent of its revenues from assembling computers for other companies, Chen said.

Increasing exposure to server and storage business, shipments of Apple Inc's new digital music player iPod Nano and rising iPhone shipments for Apple were some of the major factors driving the sales growth, Chen said.

"Such [growth] momentum is poised to last into November," he said.

Weakening desktop computer sales in the fourth quarter would hurt Hon Hai's growth because of its economy of scale, he said.

Chen maintained his positive view on Hon Hai and gave it a "buy" rating, setting target price at NT$206.

Hon Hai shares closed down 5.53 percent at NT$205 in Taipei trading yesterday.

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