Ap­ple con­cept stocks mixed de­spite record iPhone sales

The China Post - - LOCAL -

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

Earn­ings Cut

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.

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