Barclays has raised its target price on shares of Foxconn Technology Co Ltd (FTC, 鴻準), one of Taiwan’s leading metal casing suppliers, on expectations that the launch of new Apple products will boost the Taiwanese firm’s sales in the second half of this year.
In a recent research note, Barclays analyst Jerry Wu said he had upgraded the target price on FTC shares to NT$138 from NT$123 and raised his recommendation to “overweight” from “equal weight.”
Shares of FTC closed up 3.86 percent at NT$107.50 on Friday on the Taiwan Stock Exchange, while the broader market was boosted by improved sentiment toward the debt situation in the eurozone. The weighted index ended up 1.76 percent at the day’s high of 7,296.28 points.
Photo: AFP
As part of the Hon Hai Group (鴻海集團), FTC is expected to benefit from the group’s dominance as a contract supplier of metal casings to Apple, Wu said.
With Apple expected to unveil new devices in the second half, including the iPad Mini and iPhone 5, its shipments will increase accordingly, the analyst said. FTC is expected to generate 23 percent of its total sales for this year from Apple’s orders and 29 percent for next year, up from 13 percent last year, Wu said.
In addition, the rising popularity of Ultrabook computers is likely to further boost demand for metal casings, pushing FTC’s sales higher, the analyst said.
The demand from Apple will result in a drop in FTC’s idle capacity to 17 percent this year and 7 percent next year, from an estimated 25 percent last year, he said.
The launch of iPhone 5 is expected to lift FTC’s average selling price by between 20 and 30 percent, while its gross margin for this year and next year will rise to 12.7 percent and 12.8 percent, respectively, from 9 percent last year, Wu said.
He said FTC was expected to emerge from the lackluster performance seen in the first half, rising on the back of strong demand for Apple’s new devices. The metal casing supplier is expected to post earnings per share of NT$6.67 and NT$9.87 for this year and next year respectively, compared with NT$6.84 last year, he said.
Wu forecast that FTC would incur a loss per share of NT$0.2 for the second quarter of this year after the first quarter’s earnings per share of NT$2.16, adding that its bottom line for the first half was affected by its product transition and a potential investment write-down.
The weakness in the first half has given investors an opportunity to pick up the stock in anticipation that the company will make a comeback in the second half, he said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day