Hon Hai Precision Industry Co. Surges to Record High Strong Monthly Sales

Hon Hai Precision Industry Co., also known as Foxconn, witnessed a significant surge in its shares, reaching a record high following the announcement of its strongest monthly sales growth since the beginning of 2023. The robust performance has sparked optimism regarding potential iPhone and AI server sales.

The Taiwanese company, responsible for assembling the majority of Apple Inc.’s smartphones, reported an impressive 19% increase in monthly revenue, totalling NT$510.9 billion (approximately R292.5 billion), compared to NT$429.2 billion in April 2023. This achievement marked a record high for the month, as highlighted in Hon Hai’s statement.

In response to the great financial results, the company’s stock surged by as much as 6.7% on Monday, marking the most significant intraday gain in about two weeks. Despite its strong association with Apple’s business, Hon Hai has been strategically diversifying its portfolio to focus on building datacentre server racks and other equipment for artificial intelligence clusters.

While Apple’s business contributes substantially to Hon Hai’s revenue, investors closely monitor the Taiwanese company for insights into iPhone sales performance. The first quarter of the year witnessed a near-10% decline in revenue, partly attributed to underperformance in Apple’s flagship device. Full quarterly earnings are slated for release next week, providing further clarity on the company’s financial standing.

Analysts from Citigroup noted that among product lines, the computing segment experienced the most significant month-on-month growth, driven by the launch of Apple’s new MacBook Air and strong demand for iPhones ahead of China’s Labour Day holiday.

Despite the traditionally off-peak season in the second quarter, Hon Hai remains optimistic about its operations, expecting both quarter-on-quarter and year-on-year growth. The company anticipates operations to be in line with current market expectations.

Meanwhile, Apple surprised investors with robust quarterly revenue from China, showcasing resilience amidst concerns over iPhone sales. Analysts speculate on potential challenges for Hon Hai in boosting iPhone-related revenue in 2024, considering the subdued demand observed in the first quarter and ongoing uncertainties in the market.