Hon Hai shares get boost from September sales report

2019/10/07 17:47:07 fontsize-small fontsize-default fontsize-big
Hon Hai shares get boost from September sales report

Taipei, Oct. 7 (CNA) Shares of Taiwan's manufacturing giant Hon Hai Precision Industry Co. moved higher Monday two days after the iPhone assembler reported a more than 40 percent month-on-month increase in sales for September, dealers said.

Hon Hai shares rose 0.97 percent on Friday on general market optimism on sales of the new iPhone 11 series, and that momentum continued Monday soon after the market opened because of the company's strong sales report, leading to 0.96 gains at the close to NT$$73.40 (US$2.37).

In a statement released Saturday, Hon Hai reported consolidated sales of NT$587.79 billion for September, up 47.38 percent from a month earlier.

The September figure was also up 0.49 percent from a year earlier and represented a record high for the company for the month.

Analysts said the month-on-month increase in September sales reflected the arrival of the usual peak season for consumer electronics, bolstered by Apple's unveiling of the newest iPhone 11 series.

Apple introduced the high-end iPhone 11 Pro and 11 Pro Max and the cheaper iPhone 11 on Sept. 10 to replace the iPhone XS, XS Max and XR. The new iPhones have been on sale globally since Sept. 20.

The upgraded hardware specifications and pricing strategies of the iPhone 11 Pro series have been a hit in the market, and Hon Hai and other suppliers have become the beneficiaries, analysts said.

Apple accounts for about 40 percent of Hon Hai's total sales.

In addition, Hon Hai has also benefited from the intensified development of 5G applications, which has led clients to build up inventories to meet anticipated strong demand, analysts said.

Hon Hai's consumer electronics operations saw the biggest jump in shipments from a month earlier, ahead of its computing device division and communication device division, the company said.

After the strong showing in September, Hon Hai's consolidated sales for the third quarter rose 19.3 percent from the second quarter to NT$1.38 trillion, the highest ever for the company in the third quarter.

In the first nine months of this year, Hon Hai had consolidated sales of NT$3.6 trillion, up 3.32 percent from a year earlier.

Analysts said Hon Hai is expected to continue to benefit from the popularity of the new iPhones.

In a research note, TF Securities analyst Kuo Ming-chi, who has built a good reputation for forecasting Apple sales, said iPhone shipments in the first quarter of next year will rise 10 percent from a year earlier.

(By Chang Chien-chung, Chung Jung-feng and Frances Huang)
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