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Catcher to reap iPhone cycle benefits

TAIPEI -- Taiwan's Catcher Technology Co., a casing supplier for Apple Inc., will benefit from next-generation iPhone product cycle and the growing adoption of metal casings in smartphones, Morgan Stanley said Monday in a research note.

The U.S. brokerage has raised its price target for Catcher shares to NT$288 (US$9.53) from NT$225, the fifth time it has raised its price target for the Apple supplier over the past 12 months.

“While Catcher's iPhone 6 order win is not new to the market, the firm order visibility of the iPhone 6 product cycle in 2014-2015 should support continued earnings growth due to iPhone 6 substantial earnings boost,” Morgan Stanley analyst Grace Chen wrote in the note.

Chen expects Catcher to ship 10.5 million iPhone 6 casings in 2014, representing an estimated 15 percent share of overall iPhone 6 orders and will ship 20 million casings for all iPhone models, about a 17 percent share of total iPhone orders.

Shipments to Apple will represent 20 percent of Catcher's 2014 revenues and 32 percent of its sales in 2015, she said.

At the same time, Chinese smartphone brands and South Korea's Samsung Electronics Co. are considering using more metal casings in their products, which will benefit Catcher because of its diversified customer base, Chen said.

The analyst expects Catcher's second-quarter sales to grow 10 percent from the previous quarter and 9 percent from a year earlier, driven by orders for the Sony Z2 and the HTC One M8.

The ramping up of production of the iPhone 6 should start to help Catcher in the third quarter, making up 27 percent of the company's third-quarter sales and 38 percent of its fourth quarter sales, Chen predicted.

Shares of Catcher had risen 1.26 percent to NT$242 as of 9:30 a.m. Tuesday in Taipei.

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