Foxconn shares surge as Citi ups rating
Shares of Foxconn International Holdings Ltd (FIH), the world's biggest contract maker of cellphones, surged as much as 35 percent after Citigroup upgraded the stock to a 'buy' and said it expected the firm to start assembling iPhones this year.
The report, Citigroup's first positive rating on the stock in nearly three years, spurred heavy buying. The shares have languished this year because of FIH's dwindling handset-making business as its biggest customers including Nokia Oyj trail Apple Inc in the smartphone race.
FIH will see a sharp turnaround next year as Internet and software companies enter the smartphone race and the firm starts assembling iPhones for Apple, Citigroup said. Amazon, Google, Microsoft, Xiaomi, Baidu, Tencent are all trying to launch smartphones and none has in-house manufacturing, Citigroup said, raising its target price on FIH to HK$5.80 and its earnings estimate for 2013 by 134 percent.
Shares of FIH, which assembles handsets for the likes of Huawei Technologies Co Ltd and ZTE Corp , jumped as high as HK$3.69 in their biggest one-day gain ever. That compared with a 0.4 percent drop in the benchmark Hang Seng Index.
FIH shares are still down nearly 30 percent this year compared with a near-20 percent rise for the broader index.
FIH will receive orders of up to 200 million lower-to-mid-end Chinese smartphones next year, including the popular Xiaomi smartphone, said Alex Hu, chief of propriety trading at Mega Securities.
HON HAI
Hon Hai Precision Industry Co Ltd, the main supplier
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