Barclays Capital on Wednesday upgraded its target price for Catcher Technology Co (可成科技) shares, saying that the metal casings supplier would benefit from expectations that Apple Inc will launch a new version of its iPhone later this year.
Barclays raised its target price on Catcher shares to NT$300 from NT$235, while leaving its “overweight” recommendation on the stock unchanged.
Barclays said it expects Apple’s next-generation smartphone to be launched in the second half of the year and that shipments of the new model will be 35 to 40 percent higher than the previous one.
Catcher is likely to receive between 10 and 20 percent of the casing orders for the new iPhone, which should help lift its earnings in the second half of the year, Barclays said in a report.
Apple currently accounts for about 40 percent of Catcher’s total revenue.
Barclays said that the Taiwanese firm could also benefit from solid demand from its Chinese customers as China remains a fast growing smartphone market.
The report said that due to tight supply, Catcher is likely to increase its production capacity by between 20 and 40 percent in the second half of the year through the addition of 2,000 to 4,000 computer numerical control machines.
Barclays said Catcher is expected to post NT$3.8 in earnings per share for the first quarter, compared with NT$4.62 in earnings per share the previous quarter due to slow-season effects.
However, it projected Catcher’s earnings per share for the whole year to reach NT$20, up from NT$18.38 last year, adding that the figure could continue to rise to NT$26.13 next year.
The anticipated launch of larger iPhone models later this year should benefit Hon Hai Precision Industry Co (鴻海精密) because many smaller iPhones in circulation will likely be replaced, brokerage CLSA Ltd said.
Sales of the new iPhone 6 should be booming once it is launched because 225 million older iPhones will be up for replacement over the iPhone 6’s life cycle from September this year to August next year, CLSA head of technology research Nicolas Baratte said.
Of those 225 million older iPhones, 131 million are 3.5-inch models such as the iPhone 4S, the brokerage said.
“We concur that the launch of larger iPhones [4.7” and 5.5”] should trigger a larger replacement cycle as we believe that many smartphone users favor a display size of 4.5” or larger,” Baratte wrote in a note to clients on April 13.
The high volume of iPhone 6 shipments should increase Hon Hai’s operating margin to 3.1 percent this year from 2.8 percent last year, and company is also expected to more tightly control its working capital and improve its cash flow, he said.
On the back of its improved finances and the upcoming iPhone 6’s product cycle, Baratte upgraded his rating on Hon Hai shares from “underperform” to “outperform,” setting a price target of NT$96.50.
Hon Hai, the main assembler of Apple devices and the world’s largest contract manufacturer of electronic goods, posted consolidated sales of NT$883 billion (US$29.27 billion) in the first quarter of the year, down 33.5 percent from the previous quarter due to the slow season, but up 9.15 percent year-on-year.
Nvidia Corp’s demand for advanced packaging from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) remains strong though the kind of technology it needs is changing, Nvidia CEO Jensen Huang (黃仁勳) said yesterday, after he was asked whether the company was cutting orders. Nvidia’s most advanced artificial intelligence (AI) chip, Blackwell, consists of multiple chips glued together using a complex chip-on-wafer-on-substrate (CoWoS) advanced packaging technology offered by TSMC, Nvidia’s main contract chipmaker. “As we move into Blackwell, we will use largely CoWoS-L. Of course, we’re still manufacturing Hopper, and Hopper will use CowoS-S. We will also transition the CoWoS-S capacity to CoWos-L,” Huang said
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
INDUSTRY LEADER: TSMC aims to continue outperforming the industry’s growth and makes 2025 another strong growth year, chairman and CEO C.C. Wei says Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp and Apple Inc, yesterday said it aims to grow revenue by about 25 percent this year, driven by robust demand for artificial intelligence (AI) chips. That means TSMC would continue to outpace the foundry industry’s 10 percent annual growth this year based on the chipmaker’s estimate. The chipmaker expects revenue from AI-related chips to double this year, extending a three-fold increase last year. The growth would quicken over the next five years at a compound annual growth rate of 45 percent, fueled by strong demand for the high-performance computing
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
RSS