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Apple supplier Quanta's target price hit by iMac delays: brokerage

Apple supplier Quanta's target price hit by iMac delays: brokerage

Taipei, Dec. 29 (CNA) Foreign brokerage CLSA Asia-Pacific Markets has trimmed its target price and sales growth forecast for Taiwan's Quanta Computer Inc., citing supply constraints of Apple Inc.'s iMac computers. The Hong Kong-based brokerage has cut its target price for Quanta to NT$80.4 (US$2.77) from NT$83.5, and lowered its fourth-quarter sales growth forecast for the stock to 4 percent from 11 percent, it said in a note to clients on Friday. The revisions came after Quanta's November sales dropped 14 percent from October, more than CLSA's forecast of an 8 percent decrease, while the Taiwanese firm's November notebook shipments fell 6 percent from the previous month. "This reflects supply constraints of high-priced iMacs," CLSA analyst Chitra Gopal wrote in the note. Gopal explained that the iMac was launched in October 2012, leaving Quanta just two months to ramp up production for the holiday season. With new types of components and a new assembly process, the iMac remains supply constrained, resulting in disappointing November sales for Quanta, she said. "Such delays put pressure on Quanta's 2012 margins, as workforces were ready for much of the year, but volumes did not ramp up as planned," Gopal said. This prompted CLSA to cut its net profit forecast for Quanta this year by 4.3 percent, in 2013 by 3.8 percent and in 2014 by 3.4 percent to reflect lower notebook shipments of the Taiwanese contract laptop maker. In a media interview published Dec. 6, Apple CEO Tim Cook said the company planned to shift one of its Macintosh computer production lines back to the United States from China next year, with plans to invest more than US$100 million. Given that Quanta already has configuration and assembly facilities for Macs in California and Tennessee in the U.S., Apple's comments about moving production will not impact Quanta, Gopal said. Shares of Quanta closed unchanged at NT$68.3 Friday in Taipei. (By Jeffrey Wu)


Updated : 2021-05-15 17:00 GMT+08:00