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Foxconn shares rise after favorable BNP Paribas report

Shares in Foxconn International Holdings Ltd (富士康), the world's largest contract manufacturer of mobile phones, rose the most in more than a week in Hong Kong trading after BNP Paribas SA said the company would gain orders from Nokia Oyj.

The stock climbed 10 percent to HK$14.40 at the close of trading, its biggest increase since Jan. 25. Before today, the Shenzhen, China-based company had declined 25 percent in Hong Kong trading this year.

Foxconn, a unit of Hon Hai Precision Industry Co (鴻海精密), will gain orders to make more advanced handsets from Nokia as rival suppliers, such as Elcoteq SE, lose contracts, Frederick Wong (黃慶添), an analyst at BNP Paribas (法國巴黎銀行), wrote in a report yesterday.

Foxconn's larger manufacturing operations and ability to buy components at a lower cost means the company is winning an increased market share, Wong said.

Vincent Tong (童文欣), Shenzhen-based spokesman for Foxconn, could not be reached on his office or mobile phone for comment.

Nokia, the world's biggest mobile phone maker, may ask Foxconn to produce 100 million phones this year, Wong -- who has a "buy" rating on the shares -- said in the report. The Hong Kong-listed firm would also benefit from the higher average selling prices of more advanced phones that provide e-mail and Web browsing services, Wong said.

Other mobile phone makers, including Sony Ericsson Mobile Communications Ltd and Samsung Electronics Co, would also award more orders to Foxconn, Wong said.

Foxconn, which was the worst-performing stock in Hong Kong's benchmark Hang Seng Index last year, continued its slide this year on concerns that demand may ease because of a slowdown in the US economy.

The increased orders from Nokia, Sony Ericsson and Samsung may be "more than enough to offset" any US slowdown, Wong said.
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