Taipei, Shares of Hon Hai Precision Industry Co., the world's largest contract electronics maker, climbed Friday after the company reported better-than-expected sales for April, dealers said.
The buying in Hon Hai, one of the major suppliers to Apple Inc., came after the U.S. consumer electronics giant saw its share price rise to a record high, dealers said.
Hon Hai's gains, however, might be limited as investors here await the company's first-quarter results, dealers said.
Shares of Hon Hai gained 2.53 percent Friday to close at NT$85.00 (US$2.86), with 47.11 million shares changing hands, while the weighted index on the Taiwan Stock Exchange ended up 0.92 percent at 10,858.98.
The stock, one of the main drivers of the broader market, attracted buying interest soon after the equity market opened, as investors took cues from its April sales report, and the momentum continued until the end of the session, dealers said.
The stock had been falling since August 2017 amid concerns over iPhone shipments," Hua Nan Securities analyst Kevin Su said. "Today, investors simply seized on the April sales report and Apple's gains to pick up bargains."
Hon Hai shares have dropped more than 30 percent from an intra-day high of NT$122.50 on Aug. 8, 2017.
Apple shares, however, gained for the ninth consecutive session on Thursday to close up 1.43 percent at a record high.
On Thursday, Hon Hai posted NT$343.99 billion in consolidated sales for April, which represented a 1.48 percent monthly decline but beat the market estimate of a 5 percent fall amid slower shipments of the iPhone X, which the company assembles.
The April figure was also a 6.57 percent year-on-year increase as sales of Hon Hai's computing, communications and consumer electronics devices registered strong growth, the company said.
In the first four months of the year, Hon Hai's consolidated sales totaled NT$1.37 trillion, a record high for that annual period and a 5.55 percent increase from a year earlier.
According to market analysts, Hon Hai's second-quarter sales are likely to drag in the slow season before international brands release their new electronics devices in the third quarter.
As a result, Hon Hai is expected to report a single digit sequential decline in sales for the April-June period, analysts said.
"Today's gains in Hon Hai shares were technical in nature and it's too early to say when the stock will rebound," Su said. "Investors are anxiously awaiting the company's first-quarter earnings report."
Hon Hai is scheduled to release its first-quarter results on Monday.
Source: Focus Taiwan News Channel