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September 20, 2017

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Hon Hai sales growth moves to fast track in H2

TAIPEI, Taiwan -- Given the launch of Apple's new iPhone model in September, a foreign brokerage forecast Hon Hai Precision Industry Co.'s quarterly sales to grow by 13 and 39 percent sequentially in the second half.

Hon Hai Precision Industry Co. (鴻海精密) on Wednesday announced its quarterly results, with the world's largest contract electronics manufacturer posting consolidated revenues of NT$879 billion for the period of April to June, a 2-percent drop year-on-year and 0.49-percent dip from the first quarter.

Hon Hai posted NT$20.19 billion in net profit for the second quarter, up 3.29 percent from a quarter earlier. Its earnings per share (EPS) for the second quarter rose to NT$1.37 from the first quarter's NT$1.33.

The financial result stems from Hon Hai's reliance on Apple for its main source of revenues, according to analysts.

"Now investors have set their sights on the second half of this year, when Apple's new iPhone models could further boost Hon Hai's shipments and further improve the company's profitability," Taishin Securities Investment Advisory Co. analyst Tony Huang told the Central News Agency (CNA).

Huang said that Hon Hai shares appeared stronger than the broader market Wednesday as foreign institutional investors served as net buyers of 6.62 million shares on hopes of a better second half of the year. "The strength continued into today," he added.

Huang said that the positive effects of Apple's orders could be seen from August and that the fourth quarter could be a peak for Hon Hai's operations for the year.

CNA also cited Deutsche Securities' forecast to report that Hon Hai's third-quarter consolidated sales will grow 13 percent from the second quarter, and that fourth-quarter revenue could rise 39 percent from a quarter earlier.

Huang said his brokerage expects Hon Hai's EPS for 2014 to reach NT$9.2, up from NT$8.16 recorded a year earlier.

Yield Rate Is Satisfactory

Xiang Li-gang (項立剛), chief executive officer of a mainland China-based mobile industry tipster website, on Thursday cited sources familiar with Foxconn Zhengzhou Technology Park to say that Apple's next generation of iPhones has recently begun production verification tests.

Foxconn Zhengzhou is a subsidiary of Foxconn Technology (富士康科技), an overseas arm of Hon Hai Precision.

Xiang revealed that the yield rate of two new models of iPhone reached 90 percent, adding that the new models will hit the shelf in September as scheduled.

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