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'Apple concept stocks' witness decline despite latest iPhone debut in Taiwan

TAIPEI -- Shares of firms in the Apple supply chain came under pressure Friday morning, although the long-awaited iPhone 5, the newest version of the U.S. consumer electronics giant's smartphone, finally went on sale in Taiwan on the same day, dealers said.

The downside of these “Apple concept stocks” was led by the world's largest contract electronics maker Hon Hai Precision Industry Co. and handheld device camera lens supplier Largan Precision Co., as investors rushed to pocket the gains they had built in recent sessions, they said.

As of 11:17 a.m., shares of Hon Hai Precision, which assembles the iPhone and the iPad for Apple, had lost 3.54 percent to NT$92.60 (US$3.18) with 73.06 million shares changing hands, while Largan Precision had shed 6.18 percent to NT$790.00 on trading volume of 3.99 million shares.

The weighted index on the Taiwan Stock Exchange was down 0.69 percent at 7,703.46 points.

“Taiwan is a relatively small market for Apple,” Grand Cathay Securities analyst Mars Hsu said. “Investors largely ignored the launch of the iPhone 5 here, but locked in profit after a recent showing made by these Apple suppliers.”

On early Friday morning, many local consumers were seen lining up in front of the flagship outlets of three major telecom operators — Chunghwa Telecom, Taiwan Mobile and Far EasTone Telecommunications — to get their iPhone 5 on the first day of the sale.

“Despite the losses suffered by Hon Hai Precision and Largan Precision in the local bourse today, I have no concerns about their fundamentals,” Hsu said, adding their sales for November continued to hit a record high.

Hon Hai Precision posted NT$351.73 billion in nonconsolidated sales for November, up 27.57 percent from October, and also up 14.5 percent from a year earlier, after the yield rate of the company's iPhone 5 production improved.

For its part, Largan, which ranks the largest handheld device camera lens maker in the world, reported NT$3.01 billion in consolidated sales for November, up about 25 percent from the previous month and it was the third consecutive month in which Largan had posted a fresh high in consolidated sales.

The November figure was also up 133 percent from a year earlier.

“The two companies are good at leveraging their status as the largest suppliers in their own fields,” Hsu said. “The market still looks forward to their improving bottom lines.”

Hsu said he has anticipated Hon Hai Precision will post NT$7.5-NT$8 in earnings per share for 2012, while Largan Precision is likely to record NT$37-NT$38 in EPS for this year.

In the first nine months of this year, Hon Hai Precision's EPS stood at NT$4.90, and Largan Precision's hit NT$20.19.

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