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Merrill Lynch maintains 'buy' on Hon Hai Precision

Merrill Lynch maintains 'buy' on Hon Hai Precision

Taipei, May 27 (CNA) Merrill Lynch said Thursday it maintains a "buy" recommendation on Hon Hai Precision Industry, the flagship company of Foxconn Group, despite a string of deaths at a Foxconn complex in China that has hurled the company and its founder into the spotlight.
The Merrill Lynch report said that while the suicides and suicide attempts at the group's Shenzhen factory complex have damaged Hon Hai Precision's image, there is no sign that its major customers -- including Apple, Hewlett-Packard and Dell -- will cut their orders to the company anytime soon.
The report noted that Hon Hai Precision owns a large number of production facilities, which has helped it gain the upper hand in winning orders from global electronics giants.
Market consensus expects shipments of Hon Hai Precision-made notebook computers to double to 20 million units in 2011, while Merrill Lynch predicted shipments would increase to 15 million.
Taiwan-based Foxconn is the world's largest contract electronics component maker, operating a production network in Shenzhen that employs 400,000 Chinese workers.
Foxconn has been accused of mistreating its workers as 10 deaths have been reported in 12 incidents so far this year, all involving workers who jumped from factory buildings.
The latest death occurred Wednesday night when a 23-year worker jumped to his death from a company building. It was confirmed by police as a suicide Thursday.
Terry Gou, founder of the group, flew to Shenzhen Thursday morning again to do damage control. It was Gou's second trip to Shenzhen in two days.
On Wednesday afternoon, Gou apologized for the nine who had died at the time and bowed to the victims and their families, vowing to do his best to protect Foxconn employees.
Gou has denied allegations of inappropriate treatment of Chinese workers, however, saying the group is not running "blood and sweat factories." (By Erin Ho and Frances Huang)




Updated : 2021-07-28 18:11 GMT+08:00