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September 24, 2017

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Hon Hai sales top NT$300 billion in July for 3rd consecutive month

TAIPEI--Hon Hai Precision Industry Co., the world's largest contract electronics maker, said yesterday that its consolidated sales for July exceeded NT$300 billion (US$10.02 billion) for the third consecutive month on the back of solid demand for communications devices.

However, while sales of the products grew last month, sales of consumer electronics stayed little changed and demand for computer related devices turned weaker in the month, Hon Hai said.

As a result, Hon Hai's consolidated sales for July, which totaled NT$300.25 billion, was down 1.44 percent from June's NT$304.64 billion and also down 1.65 percent from the NT$305.30 billion recorded over the same period of last year.

As for the first seven months of this year, Hon Hai posted about NT$2 trillion in consolidated sales, down 8.75 percent from a year ago.

Looking ahead, market analysts said Hon Hai is expected to benefit from peak season effects in the second half of this year for the electronics business, and report an increase in consolidated sales month by month.

Analysts said it is possible for the electronics supplier to continue to post sales above the NT$300 billion level in August and hit a peak in September for the current quarter on rising orders to be placed by its clients.

Dubbed one of the "Apple concept stocks" in the local bourse, Hon Hai, which assembles iPhones and iPads for the U.S. consumer electronics giant, is likely to enjoy increasing shipments to Apple, which is expected to launch new smartphone and tablet computer models later in the year, analysts said.

Sources from Apple's supply chain said Hon Hai has completed a testing phase of assembling the new iPhone and is set to launch commercial production soon, adding that the new business with Apple could give a big boost to the Taiwanese firm's shipments, in particular in September.

In addition to the rising orders from Apple, Hon Hai's subsidiary FIH Mobile Ltd., which operates a broad production base in China, is securing orders from the non-Apple camp and tying its best to set up business ties with emerging Chinese brands, analysts said.

They said that in the second half of this year, Hon Hai is expected to witness growing contributions to its sales made by FIH Mobile, which has won orders on low and mid-range smartphone production.

Analysts said Hon Hai could post a 20-30 percent sequential increase in consolidated sales in the third quarter, and even better, the company will see its revenue continue to rise in the fourth quarter.

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