HSBC Securities Taiwan Corp is cautious about Catcher Technology Co’s (可成科技) earnings outlook this year, with pricing pressure and intensified competition some of the structural issues facing the supplier of metal casings to Apple Inc.
Growth in the company’s iPhone casing business might also be capped by its slow penetration of organic LED (OLED) iPhone models and affected by its major electronics manufacturing service (EMS) customers’ shifting focus to profit improvement from volume growth, HSBC Securities said in a note on Wednesday.
While Catcher’s shares have outperformed the broader market since Aug. 9, when the firm released strong revenue for last month, the brokerage said that its flattish margin performance did not warrant a re-rating of its shares.
Catcher’s shares closed at NT$219 on Friday, falling 2.67 percent since the beginning of the year compared with the broader market’s 8.33 percent increase over the period, Taiwan Stock Exchange data showed.
The company reported NT$8.68 billion (US$276.42 million) in revenue for last month, up 38.1 percent month-on-month and 15.77 percent year-on-year, helped by rising smartphone casing shipments. However, cumulative revenue in the first seven months fell 16.65 percent to NT$40.56 billion from the same period last year.
Despite the strong revenue last month, gross margin was 23.5 percent, which was no significant improvement from 23.1 percent in the second quarter.
Last month’s figure was also below HSBC Securities’ estimate of 30 percent for this quarter, the brokerage said.
In the iPhone supply chain, “metal casings are an easy target for cost reductions,” HSBC said, adding that Catcher might find it difficult to land big orders at leading iPhone EMS companies, who have prioritized profit improvement and tend to support their in-house casing subsidiaries.
“We retain our cautious stance on Catcher, despite recently improved sentiment for the iPhone supply chain [as it enters] the high season in the second half of the year when new iPhone models are released,” HSBC Securities said.
Catcher reported unaudited pretax income of NT$1.71 billion for last month and NT$10.87 billion for the first seven months, or earnings per share (EPS) of NT$14.01.
The brokerage cut its EPS estimate by 9.2 percent to NT$19.13 for this year from its previous projection of NT$21.06.
HSBC maintained its “reduce” rating on the stock, with its target price unchanged at NT$175.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last