Three of Apple Inc.’s suppliers listed on the Taiwan stock market—Pegatron (4938), Casetek Holdings (5264), and Parade Technologies (4966)—were recently downgraded by foreign institutional investors. Merrill Lynch indicated that Pegatron is overestimated and is heading to slowing growth after the iPhone 6’s peak season late last year.
The market is watching whether the bourse is heading for a profit-taking mood prior to the week-long stock market close for the Chinese New Year holidays, according to a report by the Economic Daily News.
The local bourse will be closed between February 16 and 23 for the most important Chinese holidays in the year.
Robert Cheng, a Taipei-based analyst at Merrill Lynch, said that the share price of Pegatron has fully reflected Apple iPhone’s contribution after surging 50 percent over the past three months, and its current share price is relatively high. “The stock is downgraded to ‘neutral’ from ‘buying’ given the lack of new catalysts for stirring significant growth in the short term apart from its expensiveness,” said Cheng.
KGI analyst Kuo Ming-chi gave a pessimistic outlook on the shipment of Apple iPad for 2015, saying it might encounter the biggest setback since its first appearance. Kuo expected a decline of 30 percent on year to between 44 and 45 million units. He added that suppliers relying heavily on iPad to boost revenue could be adversely affected, such as integrated display supplier Parade Technologies, TPK (3673), and Radiant Opto-electronics Corp. (6176)