Thu, Jul 26, 2012 - Page 14 News List

‘Apple concept stocks’ take a tumble

Staff writer, with CNA

Shares of firms in the Apple supply chain moved lower in Taipei yesterday after the US consumer electronics giant reported lower-than-expected results for the quarter ending June 30, dealers said.

Sentiment was further dampened by Apple’s low guidance for third quarter sales and earnings, raising concerns over global demand amid sluggish economic fundamentals, they said.

Shares in Hon Hai Precision Industry Co (鴻海), which churns out iPhones and iPads for Apple, fell 4.32 percent to close at NT$81.9.

Metal casing supplier Catcher Technology Co (可成) ended the day down 2.07 percent at NT$165.5 and touch panel maker TPK Holding Co (宸鴻) closed down 2.26 percent at NT$324.

“Apple’s 5 percent decline in after-hours trading on Wall Street, followed disappointing results paved the way for selling in local firms in the supply chain this morning,” Mirae Asset Management analyst Arch Shih (施博元) said.

“Apple’s results and forecasts simply confirmed the impact of falling global demand,” Shih said. “It is unlikely that any high-tech firm can escape the slowdown.”

However, Barclays PLC said yesterday that weakness in iPhone shipments in the second quarter offered a good opportunity to buy stocks in the Apple supply chain.

Apple reported on Tuesday iPhone shipments of 26 million units in the April-June quarter, below market expectations of between 28 million and 30 million units, Barclays said in a research note.

The 17 million iPads shipped during the quarter exceeded market expectations of 14-15 million units, while the 4 million iMac computers shipped were in line with the market consensus, the bank said.

“We thought there was a higher probability for a ‘mismatch’ between iPhone shipments and market expectations at times this year due to a product transition, with the iPhone 5 coming out in the fall,” Barclays analyst Kirk Yang (楊應超) wrote in the note.

He said the iPhone "mismatch" might happen again in the third quarter depending on when Apple puts the iPhone 5 on the market, and he continued to believe fourth quarter shipment projections of around 43 million iPhones were simply too low.

Barclays’ top picks among Apple supply chain stocks include Hon Hai and cellphone camera lens supplier Largan Precision Co (大立光).

Other recommended stocks were printed circuit board maker Zhen Ding Technology Holding (臻鼎科技) and casing supplier Foxconn Technology Co (鴻準), as well as Hong Kong-listed acoustics components supplier AAC Technologies Holdings Inc (瑞聲聲學科技).

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