Shares of local high-tech firms in the Apple Inc supply chain rallied yesterday on robust pre-order sales of the newly unveiled iPhone 4S, dealers said.
Investors backed these “Apple concept stocks” because of rising expectations for fourth-quarter revenues triggered by strong initial demand for the iPhone 4S, a faster version of the iPhone 4 that Apple launched last week, they said.
At the close of Taipei trading, Hon Hai Precision Industry Co (鴻海精密), which assembles iPhones and iPads for Apple in its broad production base worldwide, rose 3.1 percent to NT$73.20, with 50.19 million shares changing hands.
Largan Precision Co (大立光), which supplies cellphone camera lens to Apple, gained 6.9 percent to NT$635, and TPK Holding Co (宸鴻), which generates more than 50 percent of its revenues from flat-panel sales to the US consumer electronics giant, added 6.89 percent to NT$543. In comparison, the benchmark TAIEX was up 2.59 percent.
The Cupertino, California-based Apple said on Monday that pre--order sales for the iPhone 4S topped 1 million units within 24 hours after they were first accepted in the US, Australia, Canada, France, Germany, Japan and Britain, compared with about 600,000 iPhone 4’s sold on its first day of pre-order sales last year.
“The share buying showed that investors here are happy with the strong pre-order sales of the iPhone 4S as they expect that the new gadget will lift Apple’s sales in the fourth quarter and eventually benefit the supply chain,” Hua Nan Securities (華南證券) analyst Stan Chang said.
Chang said Apple is due to report its third-quarter results soon, and many investors in Taiwan are optimistic that the company will give encouraging guidance for the fourth quarter.
“Apple’s share price rose more than 5 percent on Wall Street overnight, pointing to an upbeat mood. The strong showing of Apple shares served as a catalyst for gains by local firms in the supply chain,” Chang said.
Hon Hai’s consolidated sales last month, for example, which rose 3.42 percent from August to NT$221.78 billion, were better than expected, and Chang said the company was expected to sustain the momentum into the fourth quarter on continued strong orders from Apple.
The market estimates that Apple accounts for about 25 percent of Hon Hai’s total sales.
“In addition, it seems that European leaders have gotten more serious about resolving their debt problems, which should help consumer confidence recover and boost global demand for high-tech products,” he said.
Over the weekend, the leaders of Germany and France pledged to come up with a plan at a G20 meeting early next month to keep the debt crisis under control.
The upbeat mood prompted foreign institutional investors to resume buying large-cap Taiwanese stocks in both the old economy and high-tech sectors, propelling the TAIEX forward by 186.75 points at the day’s high of 7,398.71, on turnover of NT$110.79 billion (US$3.65 billion).
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