Apple concept stocks mixed despite record iPhone sales
Taiwanese suppliers to Apple Inc. appeared mixed Wednesday morning although the U.S. consumer electronics giant reported record first weekend sales for its latest iPhone models, dealers said.
Largan Precision Co. ( ), a smartphone camera lens supplier for the iPhone, in particular, came under greater downward pressure after Citigroup Global Markets cut its forecasts of the Taiwanese firm’s earnings for 2015 and 2016 amid concerns that the global smartphone market showed signs of slowing down, they said.
As of 11:03 a.m., shares of Largan, the most expensive stock in the local market, had fallen 5.31 percent to NT$ 2,585.00 (US$78.33), and shares of Pegatron Corp. ( ), an assembler of the iPhone, had dropped 4.35 percent to NT$79.20.
Shares of Hon Hai Precision Industry Co. ( ), which rolls out iPhones and iPads, fell 0.12 percent to NT$84.20, while shares of metal casing maker Catcher Technology Co. ( ) added 0.89 percent to NT$341.00, and shares of Taiwan Semiconductor Manufacturing Co. (TSMC,
), which supplies the A9 process to the new iPhones, added 1.97 percent to NT$129.50.
The weighted index on the Taiwan Stock Exchange was down 0.46 percent at 8,095.03.
“The first round of the new iPhone global sales for this year included China, which was excluded last year. The growth of the first weekend sales compared with a year earlier came from demand from China, so the sales figure just met market expectations,” Hua Nan Securities analyst Kevin Su said.
Apple Shares Fell
According to Apple, the first weekend sales of its latest smart- phones, the 4.7-inch iPhone 6s and the 5.5-inch iPhone 6s Plus, rose to 13 million units from the 10 million recorded a year earlier for the previous iPhone 6 and iPhone 6 Plus models.
“Despite the first weekend sales of the new iPhone, Apple shares still fell more than 3 percent overnight, which has dampened sentiment toward Taiwanese suppliers to the U.S. firm this morning,” Su said.
“Investors need more data to be convinced that the new iPhones will continue to attract strong buying.”
Among the falling Apple concept stocks, Largan faced heavier selling to deal a blow to the broader market, while TSMC’s gains offset the impact resulting from the losses incurred by other Taiwanese Apple suppliers, Su said, referring to a downgrade by Citigroup Global Markets.
Forecast of Largan’s
In a research note, the U.S. brokerage cut its forecast of Largan’s earnings per share for 2015 and 2016 by 8 percent and 23 percent, respectively, to NT$162.44 and NT$163.01, and the cut in forecasts have sparked fears that other foreign brokerages will follow suit to issue their own downgrades. Citigroup Global Markets has issued a neutral rating and a target price of NT$2,840 on the stock.
“After Largan shares fell below the 240-day moving average of NT$2,740 last week, the stock has become technically fragile. The downgrade by Citigroup Global Markets no doubt added more pressure and made on the stock even weaker,” Su said.
Su said that Largan could see some technical support as it moves closer to NT$2,250 in the near term.