Hon Hai surges on Q2 results, capitalization up by NT$50 bil.
The China Post news staff
September 4, 2012, 5:47 pm TWN
Hon Hai Precision Industry surged yesterday after reporting better-than-expected second-quarter results, with the firm's market capitalization surging by over NT$50 billion in a single day.
The firm opened at its upper daily limit of NT$90.7 and closed at NT$90, on trade volume of NT$9.51 billion, over 10 percent of total trade volume on the local bourse yesterday.
Hon Hai on Friday reported second-quarter earnings per share of NT$1.06, better than the NT$0.3 to NT$0.5 estimated by foreign investors, who went on a selling spree for days.
Second-quarter gross profit margin hit 7.92 percent, higher than the 6.64 percent for the first quarter and 7.28 percent for the same period last year. Operating margin was 2.4 percent, also higher than market expectations.
At the end of the trade, Hon Hai saw 105,800 stock units changing hands. Each unit is 1,000 shares. Friday, Hon Hai saw trade volume of only 39,600 units.
Meanwhile, foreign institutional investors expressed mixed opinions on how Hon Hai will fare in the short term.
Morgan Stanley yesterday raised its target price of Hon Hai from NT$94.55 to NT$103 and maintained its "overweight" rating for the firm. Nomura raised the target price from NT$104 to NT$108.
Goldman Sachs, meanwhile, slashed its Hon Hai target price from NT$90.91 to NT$77 and kept its "neutral" rating, expressing the view a slowdown in Apple growth dynamics and a change in product mix may limit Hon Hai's profitability.
Separately, Taiwan share prices closed up 53.47 points, or 0.72 percent, at 7,450.53 yesterday. Turnover totaled NT$74.70 billion during the trading session.
A total of 2,557 stocks closed up, 1,758 finished down, and 396 remained unchanged.
Most of the market's eight broad stock categories rose, with paper and pulp shares posting the highest gains, finishing up 2.3 percent.
Shihlin Paper Corp. rose by the daily maximum of 7 percent to close at NT$49.20.
Some high-priced electronics stocks also outperformed the border market.
TPK Holding Co., a major supplier of touch modules for Apple Inc.'s iPhone smartphones and iPad tablet computers, finished up 3.10 percent at NT$399.0.