Wed, Sep 28, 2011 page11

• Production not affected by Yantai fire: Foxconn

  APPLE BITES: A JPMorgan Chase analyst says he differs with his JPMorgan collegues in Asia on the perceived impact of a cut in iPad orders from vendors there

  • Bloomberg
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  A fire broke out this morning at Foxconn Technology Group’s (富士康) Yantai plant in Shandong Province, China, a company official, who can’t be quoted by name, said by telephone yesterday.

  The fire was put out and there were no reports of injuries, and production would not be affected, the official said.

  Known as Hon Hai Precision Industry Co (鴻海) in Taiwan, Foxconn said the fire broke out at about 10am. The possible source of the fire was an exhaust pipe on a rooftop of a building at the plant. The fire was put out shortly afterwards, it said.

  Shares of Hon Hai, the world’s largest maker of electronics components, fell 0.73 percent to close at NT$68.1 on the Taiwan Stock Exchange yesterday.

  In early Taipei trading, Hon Hai shares rose on news that JPMorgan Chase & Co analyst Mark Moskowitz said research from his colleagues in Asia about a cut in Apple Inc iPad orders doesn’t represent the views of the securities firm’s US team.

  “Apple is fine,” Moskowitz wrote on Monday.

  Apple is cutting orders to vendors in the supply chain for its iPad tablet computer, a move that may mean slower sales for companies including Hon Hai, according to a report by Hong Kong-based JPMorgan analyst Gokul Hariharan dated Sunday.

  The Sunday report said multiple supply-chain vendors indicated a 25 percent reduction in so-called sell-in orders in the past two weeks, the first such cut that analysts at JPMorgan’s Hong Kong-based electronic manufacturing services team said they have seen. Sell-in orders are those made by a company — in this case, Apple — to a supplier.

  Analysts at other firms also issued research aimed at quelling speculation that demand for iPads had diminished — a concern that dragged down Apple’s stock as much as 3.2 percent in NASDAQ Stock Market trading on Monday.

  Chris Caso, an analyst at Susquehanna International Group, said the resulting “chatter” was “misleading” and Gene Munster, at Piper Jaffray Cos, said changes in orders may be the result of Apple moving some iPad manufacturing out of Asia to Brazil.

  The earlier report “has the equity markets worried about Apple,” Moskowitz wrote.

  “Mr. Hariharan’s report focuses on how Hon Hai could be impacted by potential iPad sell-in order cuts. This alert is not the view of the US IT Hardware team,” he wrote.

  Moskowitz maintained his projection that Apple will sell 10.9 million to 12 million iPads in the fiscal fourth quarter.

  “We disagree with any talk of a shipment slowdown,” analysts at Barclays Capital wrote in a report. “The numbers being circulated Monday might be related to components and not to actual iPad 2 shipments, in our view. Components checks [are] not a good proxy for actual iPad product shipments.”

  Additional reporting by staff writer

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