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Updated Sunday, February 12, 2012 0:01 am TWN, CNA

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Hon Hai January sales increase by nearly 50% on popular high-tech gear

TAIPEI -- Hon Hai Precision Industry Co., which produces iPhones and iPads for Apple, enjoyed a nearly 50 percent increase in sales for January from a year earlier due to the popularity of the U.S. consumer electronics giant's products.

In an announcement released by Hon Hai Friday, the company said it posted NT$274.66 billion (US$9.28 billion) in unconsolidated sales for January, up 47.48 percent from a year earlier.

Hon Hai, the world's largest contract electronics maker, operates a broad global production base, in particular in China. It assembles gadgets for international brands such as Hewlett-Packard, Dell and Sony, in addition to Apple.

While the January figure was more than 10 percent lower than the NT$316.94 billion recorded in December, when the peak season effect of the global high tech sector boosted demand, last month's sales ranked the fourth monthly highest in the company's history.

Market analysts said robust shipments of Apple's iPhones and iPads in January helped Hon Hai offset the impact from the slow-season effect in the first quarter for the global personal computer and communication device industries.

They said strong demand for iPhones and iPads had led Hon Hai's production lines to work overtime during the month, while many other electronics manufacturers suffered production reduction, a reflection of the reduced working days for the Lunar New Year holiday in January.

Analysts said due to the almost 50 percent growth in sales for January, Hon Hai outperformed many other large cap high tech firms in Taiwan, such as smartphone maker HTC Corp. and cell phone camera lens supplier Largan Precision Co., which recorded lower-than-expected sales for the month.

As Apple's share price has repeatedly hit a record high on Wall Street in recent trade, it is expected that shares of Hon Hai, one of the so-called “Apple concept stocks,” will steam ahead, they said.

Morgan Stanley and Citigroup Global Markets have issued a target price on Hon Hai shares at NT$125.00 and NT$117.00, respectively, and recommended a “buy” on the stock.

On Friday, Hon Hai shares closed down 1.45 percent at NT$102.00 on the Taiwan Stock Exchange as investors pocketed the gains they accumulated recently.

Meanwhile, Valor Economico, a Brazil-based newspaper, reported production at Foxconn Technology Group's plant located in Jundiai in the state Sao Paolo is likely to be suspended from Feb. 20.

However, the newspaper said the cause and other details about the suspension of production at the plant, which assembles products for Apple, was unclear.

Hon Hai is the flagship company of Foxconn, which is also known as Hon Hai Group.

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