Barclays Capital on Wednesday upgraded its target price for Catcher Technology Co (可成科技) shares, saying that the metal casings supplier would benefit from expectations that Apple Inc will launch a new version of its iPhone later this year.
Barclays raised its target price on Catcher shares to NT$300 from NT$235, while leaving its “overweight” recommendation on the stock unchanged.
Barclays said it expects Apple’s next-generation smartphone to be launched in the second half of the year and that shipments of the new model will be 35 to 40 percent higher than the previous one.
Catcher is likely to receive between 10 and 20 percent of the casing orders for the new iPhone, which should help lift its earnings in the second half of the year, Barclays said in a report.
Apple currently accounts for about 40 percent of Catcher’s total revenue.
Barclays said that the Taiwanese firm could also benefit from solid demand from its Chinese customers as China remains a fast growing smartphone market.
The report said that due to tight supply, Catcher is likely to increase its production capacity by between 20 and 40 percent in the second half of the year through the addition of 2,000 to 4,000 computer numerical control machines.
Barclays said Catcher is expected to post NT$3.8 in earnings per share for the first quarter, compared with NT$4.62 in earnings per share the previous quarter due to slow-season effects.
However, it projected Catcher’s earnings per share for the whole year to reach NT$20, up from NT$18.38 last year, adding that the figure could continue to rise to NT$26.13 next year.
The anticipated launch of larger iPhone models later this year should benefit Hon Hai Precision Industry Co (鴻海精密) because many smaller iPhones in circulation will likely be replaced, brokerage CLSA Ltd said.
Sales of the new iPhone 6 should be booming once it is launched because 225 million older iPhones will be up for replacement over the iPhone 6’s life cycle from September this year to August next year, CLSA head of technology research Nicolas Baratte said.
Of those 225 million older iPhones, 131 million are 3.5-inch models such as the iPhone 4S, the brokerage said.
“We concur that the launch of larger iPhones [4.7” and 5.5”] should trigger a larger replacement cycle as we believe that many smartphone users favor a display size of 4.5” or larger,” Baratte wrote in a note to clients on April 13.
The high volume of iPhone 6 shipments should increase Hon Hai’s operating margin to 3.1 percent this year from 2.8 percent last year, and company is also expected to more tightly control its working capital and improve its cash flow, he said.
On the back of its improved finances and the upcoming iPhone 6’s product cycle, Baratte upgraded his rating on Hon Hai shares from “underperform” to “outperform,” setting a price target of NT$96.50.
Hon Hai, the main assembler of Apple devices and the world’s largest contract manufacturer of electronic goods, posted consolidated sales of NT$883 billion (US$29.27 billion) in the first quarter of the year, down 33.5 percent from the previous quarter due to the slow season, but up 9.15 percent year-on-year.
Malaysia is scrambling to protect its assets as the descendants of the last sultan of the remote Philippine region of Sulu look to enforce a US$15 billion arbitration award in a dispute over a colonial-era land deal. In 1878, two European colonists signed a deal with the sultan for the use of his territory in present-day Malaysia — an agreement that independent Malaysia honored until 2013, paying the monarch’s descendants about US$1,000 per year. Now, 144 years later after the original deal, Malaysia is on the hook for the second-largest arbitration award on record for stopping the payments after a bloody incursion
RECOVERED CONFIDENCE: As market rationality returns, Taiwanese stocks that have lagged behind their US peers might soon catch up, Allianz researchers said Local shares last week defied heavy pressure from China’s military drills in waters around Taiwan, and investors this week are expected to pay attention to earnings results from several tech heavyweights as well as the latest economic data on exports and GDP. The TAIEX closed at 15,036.04 points on Friday, posting a weekly increase of 0.24 percent from 15,000.07 on July 29, Taiwan Stock Exchange data showed. Over the same period, the FTSE TWSE Taiwan 50 Index, which comprises Taiwan’s top 50 stocks in terms of market capitalization, closed up 0.93 percent at 11,750.15 points, while the Formosa Stock Index, which measures
Pharmaceutical start-up AcadeMab Biomedical Inc (研生生醫) said it has been developing a COVID-19 antibody drug, an endeavor not being undertaken by many other Taiwanese pharmaceutical firms. The company was spun off from Academia Sinica’s Institute of Cellular and Organismic Biology in 2020 and has only 16 employees. It has set its sights on the innovative field of the monoclonal antibody treatment of tumors. The start-up began developing antibody drugs in January, after seeing that COVID-19 vaccines could not effectively protect people from new variants of SARS-CoV-2, AcadeMab Biomedical chief strategy officer Pearl Fong (俸清珠) said in an interview with the Taipei Times
FORECAST EXCEEDED: China’s curbs on some Taiwanese goods are unlikely to affect trade given inter-reliance in the electronics industries, a finance ministry official said Exports last month spiked 14.2 percent to US$43.32 billion, the second-highest increase on record and the 25th consecutive month of gains, driven by global demand for electronics used in high-performance computing and vehicles, the Ministry of Finance said yesterday. The ministry expects the trend to sustain this month and beyond, although the pace could slow due to inventory corrections for laptops, smartphones and other consumer electronics. “The July results proved stronger than expected despite rising fears over economic uncertainty,” Department of Statistics Director-General Beatrice Tsai (蔡美娜) said, adding that a high sales season in the West and stabilized COVID-19 infections in China