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Apple concept stocks higher on fresh iPhone 5 launch hopes

2012/08/09 12:02:47

Taipei, Aug. 9 (CNA) Shares of local firms in the Apple supply chain moved higher Thursday morning as buying was triggered by fresh hopes that the U.S. consumer electronics giant will launch the iPhone 5 in September, dealers said.

The strong July sales figures of these local suppliers prompted many investors to speculate that Apple has started placing orders with its component suppliers to meet demand in the lead-up to the launch of the long-awaited iPhone 5, they said.

As of 11:20 a.m., shares of cell phone camera lens supplier Largan Precision Co. had added 3.10 percent to NT$599.00 (US$20.03), and shares of rival Genius Electronic Optical Co. had risen 4.12 percent to NT$227.50, while connector maker Cheng Uei Precision Industry Co. had gained 3.63 percent to NT$57.10.

The benchmark weighted index was up 1.08 percent at 7,398.63 points.

"The sales growth of these Apple suppliers is encouraging," Mirae Asset Management analyst Arch Shih said. "The strong sales growth prompted many investors to think the demand largely came from Apple."

"It has become more and more likely that Apple will unveil its iPhone 5 in September as the market has widely anticipated," the analyst said.

In July, Largan posted NT$1.18 billion in sales, up 21 percent from June, and Genius recorded NT$870 million sales, up 19.69 percent from a month earlier, while Cheng Uei witnessed sales growth up 22.85 percent from a month ago to NT$7.87 billion.

In the case of Largan, which will report its second quarter results later in the day, the market was expecting the company to come up with positive guidance for the third quarter on the back of an increase in shipments to Apple, the dealers said.

"So, riding the waves of optimism toward Apple's new gadgets, buying in these local suppliers appeared impressive," Shih said.

However, Shih said it remains to be seen whether the solid sales will continue and become even stronger if Apple launches iPhone 5 in September as expected.

"There are fears that the global high tech sector will encounter a shortage of microchips, in particular for mobile devices. I am afraid that the shortage will hamper production of the new Apple smartphone and eventually hurt shipments of local suppliers," Shih said.

"Moreover, the weakness of the world's economic fundamentals still plays an important role in global demand. Please watch out," he said.

Shih said investors should keep alert over a possible pullback after the latest strong gains in the local suppliers' share prices.

(By Frances Huang)