Hon Hai November sales hit high; shares up over 1%

12/04/2020 03:58 PM
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CNA file photo
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Taipei, Dec. 4 (CNA) After reporting a new monthly sales high for November a day earlier, shares of Taiwan-based manufacturing giant Hon Hai Precision Industry Co. moved higher by more than 1 percent on the main board Friday, dealers said.

The buying also reflected optimism toward the peak season effect in the fourth quarter for Hon Hai, one of the most important iPhone assemblers, at a time when the latest Apple smartphones have become a hit on the global market, the dealers said.

Hon Hai shares rose 1.10 percent to close at NT$82.90 (US$2.93) on the Taiwan Stock Exchange, where the weighted index ended up 1.11 percent at 14,132.44.

The stock got a boost soon after the equity market opened and its strength continued into the end of the session in the wake of its November sales report, even though it came off an early high of NT$83.40.

"Hon Hai shares have lagged behind the bellwether electronics sector, as well as the broader market, for some time," Concord Capital Management analyst Jason Chen said. "So it was no wonder that the positive lead from the sales report prompted bargain hunters to buy into the stock today."

In a statement released a day earlier, Hon Hai said it posted NT$681.38 billion in consolidated sales in November, a new monthly high in the company's history. The November revenue rose 11.24 percent from a month earlier and also grew 13.06 percent from a year earlier.

Analysts said the growth largely resulted from success in the global market enjoyed by Apple's latest iPhone 12 series, which went on global sale in late October. The four iPhone 12 models all support the 5G network.

Analysts added that Hon Hai serves as the sole assembler of the larger and more advanced iPhone 12 Pro and iPhone 12 Pro Max, which carry a higher price tag, and as the two models have received a warmer reception, they have pushed up the Taiwanese supplier's revenue.

In addition, analysts said Hon Hai has also benefited from rising popularity of servers and gaming consoles in the global market in a stay-at-home economy.

In the first 11 months of this year, however, Hon Hai's consolidated sales totaled NT$4.64 trillion, down 3.29 percent from a year earlier.

In November alone, compared with October, Hon Hai said, its consumer electronics division scored better in performance terms than the electronic component division, the cloud technology-based communication division, Hon Hai said.

Riding the wave of the peak season effect, analysts said, Hon Hai is expected to see its sales to top NT$1.8 trillion in the fourth quarter, up almost 40 percent from the third quarter.

In addition, Hon Hai's net profit for the October-December period is expected to surpass NT$49.5 billion, up about 60 percent from a quarter earlier, with earnings per share of more than NT$3.5.

(By Chung Jung-feng and Frances Huang)

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