Australia’s Macquarie Securities has downgraded its stock rating for Hon Hai Precision Industry Co (鴻海精密) to “neutral” from “outperform,” citing weaker-than-expected demand for Apple Inc’s newest version of the iPhone.
The brokerage also lowered its target price on Hon Hai stock to NT$90 from NT$120, amid growing concern over the poor demand for the iPhone 5 expected during the first half of next year and in view of the slumping demand for the iPad tablet, which it said was a result of the iPad mini’s cannibalization.
Hon Hai, the flagship unit of Foxconn Technology Group (富士康科技集團), assembles iPhones and iPads for Apple.
“We believe the market’s expectations of both products are too high and expect Wall Street to lower their forecast over the coming months,” Taipei-based Macquarie Securities analyst Daniel Chang (張博淇) wrote in a report dated Thursday.
Macquarie also expects iPhone 5 shipments during the fourth quarter of this year to touch 44 million units, which is lower than an earlier forecast of 48 million units.
It also expects iPhone 5 shipments to drop by between 35 and 40 percent sequentially to between 26 million and 28 million units during the first quarter of next year, with the figure slipping further to 22 million units in the second quarter of next year.
The feeble demand could also be a result of less differentiated designs and the shortening gap between Apple and its rivals, given that various new models are expected to be launched during the first half of next year by Apple’s competitors, Chang said.
Hon Hai, Apple’s main manufacturer, could see its operating margins negatively affected during the first six months of next year due to a low shipment forecast for the high-margin iPhone 5, Chang said.
In a separate report, US bank Citigroup Inc maintained its “buy” rating on Hon Hai and its target price of NT$132 for the stock, saying the Taiwanese electronics maker could enhance its bargaining power with Apple as it supplied more components for the iPhone 5.
Citigroup now forecasts total iPhone shipments in the first quarter of next year to total about 45 million units, higher than its original estimate of 40 million units.
Hon Hai shares closed down 4.69 percent at NT$91.5 on Friday in Taipei.
Softbank Group Corp plans to keep a stake in the chip designer Arm Ltd, even if it sells a partial interest to Nvidia Corp, the Nikkei reported. The companies are negotiating terms, the newspaper reported, citing sources. Softbank might take a stake in Nvidia after it buys Arm, the report said. Nvidia and Arm might also merge through a share swap, and Softbank would become a major shareholder in the combined company, it said. The two parties aim to reach a deal in the next few weeks, the sources said, asking not to be identified because the information is private. Nvidia is the
END TO SPECULATION: The hotel’s management contract has been extended, despite reports that it wanted to end its alliance with Hyatt Hotels over a deal with Riant Capital Singapore-based Hong Leong Hotel Development Ltd (豐隆大飯店股份) yesterday said it has extended a management contract to ensure the continued presence of the Grand Hyatt brand in Taipei, ending rumors that the two sides were parting ways. “We are pleased Hyatt is able to come to terms on the extension of the management contract of Grand Hyatt Taipei,” said Kwek Leng Beng (郭令明), executive chairman of City Developments Ltd (城市發展) and Millennium & Copthorne Hotels Ltd (千禧國敦酒店). Hong Leong Hotel Development is a subsidiary of Millennium, and both fall under the Hong Leong Group (豐隆集團). The Grand Hyatt Taipei (台北君悅大飯店), owned and built by
Gold surged to a fresh record on Friday, fueled by US dollar weakness and low interest rates, while silver headed for its best month since 1979. Spot bullion is up more than 10 percent this month, as US real yields lingered near record lows. While the ferocity of rallies in gold and silver cooled in the middle of the week, most market watchers predict there might be more gains ahead. Both metals have added about 30 percent this year, with gold and silver exchange-traded funds boosting holdings to a record, as concern about the fallout from the COVID-19 pandemic fuels demand for
MOVING FROM CHINA? The article did not name the company, but Foxconn, Wistron and Pegatron were among firms chosen for a production-linked incentive plan in India An Apple Inc vendor is looking at shifting six production lines to India from China, which could result in US$5 billion of iPhone exports from the South Asian nation, the Times of India reported, citing people familiar with the matter who it did not identify. The establishment of the facility would create about 55,000 jobs over about a year, the newspaper reported, not naming the Apple vendor. It would also cater to the domestic market and expand operations to include tablets and laptops, the newspaper reported. Samsung Electronics Co and Apple’s assembly partners are among 22 companies that have pledged 110 billion