Catcher Technology Co (可成), the nation’s leading supplier of light-metal casings and enclosures for mobile devices, last week reported lower-than-expected revenue for last month, prompting KGI Securities Investment Advisory Co (凱基投顧) to cut its sales forecast for this quarter and warn that downside pressure is likely to continue next quarter.
“Catcher’s November sales were lower than the market consensus estimate and our forecast, mainly because of a lackluster demand for Apple Inc’s iPhone XR,” KGI analyst Angela Hsiang (向子慧) said in a research note on Friday.
Catcher’s consolidated revenue decreased 25.1 percent month-on-month to NT$9.62 billion (US$311.9 million) last month, falling short of market expectations of more than NT$10 billion and marking the first monthly decline after eight straight months of increase.
On a yearly basis, last month’s figure dropped 13.35 percent.
However, Catcher’s cumulative revenue in the first 11 months of this year reached its highest level for the period at NT$88.71 billion, up 5.61 percent from a year earlier, partially due to contributions from casings for notebook computers, including MacBooks and other consumer electronics.
Apple launched the 6.1-inch LCD iPhone XR on Oct. 26 after introducing the more expensive iPhone XS and iPhone XS Max on Sept. 21, but consumer take-up of the three has been weaker than expected.
Overall iPhone shipments for next quarter could fall by 30 percent to 49 million units from 70 million units this quarter, with the full-year shipments for next year likely to drop by 5 to 7 percent annually to between 195 million and 200 million units, KGI said.
“We expect Catcher’s December revenue to be lower than this month’s on the view that iPhone demand will turn weaker while the low season is coming,” Hsiang said.
“Accordingly, we revise our fourth-quarter revenue forecast to increase by 22 percent quarterly, but decrease 7 percent annually to NT$30.6 billion, compared with our previous estimate of increasing 35 percent quarterly and 3 percent annually,” she said, adding that revenue could see a quarterly drop of about 30 percent next quarter.
KGI also adjusted its full-year revenue estimate to NT$96.86 billion, compared with its previous estimate of NT$100.12 billion, and forecast that Catcher’s earnings per share (EPS) would be NT$37.85 for this year and decline to NT$30.72 next year, Hsiang said.
KGI cut its 12-month target price on the stock from NT$344 to NT$276, valuing the firm at nine times its estimated EPS for next year, but retained an “outperform” rating on the stock, suggesting investors could buy on weakness.
“The valuation is attractive, despite the downside risk due to sliding iPhone orders,” Hsiang said.
Catcher shares on Friday fell 0.42 percent to close at NT$236 in Taipei trading.
The stock has fallen 28.05 percent so far this year.
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