Voice of the People, Bridge to the World. »
Hon Hai shares under pressure on January sales data
Central News Agency
2014-02-11 11:49 AM
Taipei, Feb. 11 (CNA) Shares of Hon Hai Precision Industry Co. came under pressure Tuesday morning after the world's largest contract electronics maker reported a more than 30 percent month-on-month sales decline in January, dealers said. The stock could face more downward pressure as investors fear the company will continue to feel the pinch of the traditionally slow first quarter, they said. As of 11:02 a.m., shares of Hon Hai had fallen 1.47 percent to NT$80.50 (US$2.65) with 28.81 million shares changing hands. The weighted index on the Taiwan Stock Exchange was up 0.38 percent at 8,424.20. "After clients' restocking in the fourth quarter of last year, momentum for the first quarter has slowed down. The January sales were the evidence, which led to selling in Hon Hai shares soon after the local bourse opened," Ta Ching Securities analyst Andy Hsu said. "In addition, the slower January sales data reflected the reduced number of working days due to the Lunar New Year holiday," Hsu said. The holiday in Taiwan fell between Jan. 30 and Feb. 4, but the Chinese factories of many Taiwan-based companies like Hon Hai started their vacations earlier in the month, losing several days of production. In a statement released Monday, Hon Hai said it had consolidated sales of NT$314.55 billion in January, down 35.9 percent from December, but up 0.33 percent from a year earlier. In the fourth quarter of last year, Hon Hai's consolidated sales hit a record high of NT$1.33 trillion, up 44.64 percent from the third quarter after Apple Inc. launched its latest iPhone models. Apple accounts for more than 40 percent of Hon Hai's total sales. "The sales peak is now in the past. A lower-than-expected sales forecast by Apple has led many investors to take a cautious attitude toward Hon Hai," Hsu said. At an investor conference on Jan. 27, Apple said its sales for the January-March period could range between US$42 billion and US$44 billion, compared with an earlier market estimate of US$46.1 billion. In the previous quarter, Apple's sales totaled US$57.6 billion. "Amid such cautious sentiment about Apple, it was no surprise that investors are dumping Hon Hai shares now, and the selling has made the stock technically weaker," Hsu said. "Hon Hai shares could continue a downtrend in the short term before the stock moves closer to its nearest technical support at around NT$79.20," Hsu said. Hsu expected Hon Hai's shipments to begin picking up in the second quarter once the slow season effect eases. "If Apple unveils the iPhone 6 by June as the market is widely anticipating, Hon Hai's sales will stage a strong rebound next quarter." (By Jalen Chung and Frances Huang)
Advertisement »
HOME |  WORLD |  Politics |  Business |  Sports |  TAIWAN |  Technology |  Health |  Society |  OPINION |  E-Paper
  • Taiwan News  ©  2016 All Rights Reserved.