Hurting from the outbreak of the novel coronavirus, smartphone maker Apple said it would not meet its revenue forecasts for the March quarter – an announcement that dragged down the shares of its Asian suppliers on Tuesday.
The shares of Hong Kong-listed AAC Technologies, which makes acoustic parts for Apple dropped 3.82 percent, or HK$2.25 (US$0.29), to HK$56.6. BYD Electronic (International) Co Ltd, a subsidiary of Chinese manufacturer of automobiles saw it shares fall 5.03 percent to HK$15.48. Chinese companies Luxshare Precision and Goertek, key manufacturers of Apple's AirPods, saw their shares sink 0.67 percent and 2.28 percent, respectively.
The shares of Hong Kong-listed AAC Technologies, which makes acoustic parts for Apple dropped 3.82 percent, or HK$2.25 (US$0.29), to HK$56.6
The company said on Monday evening it did not expect to meet its revenue targets which the company had set for the March quarter – between US$63 billion to US$67 billion – because of the impact of coronavirus outbreak.
The epidemic has had a negative short-term impact on Apple’s business but may not affect its sales for the whole year, said Frank Lee, a senior investment strategist at DBS Bank Hong Kong.
He explained that the epidemic has only had a limited impact on the demand for smartphones in the second half of this year, noting that new phones supporting the 5G network will still be in demand.
In a statement, Apple said the main reasons for it failing to meet its revenue forecasts were temporary global iPhone supply constraints and lower demand for Apple products in China – the largest market for Apple outside the United States.
Although all iPhone manufacturing partner sites in China have reopened, Apple said they were developing more slowly than it had anticipated. The iPhone supply shortages will temporarily affect the company’s revenues worldwide.
According to China’s official data of the epidemic, it is possible that smartphone manufacturers will resume work on a full scale in March. This is because most factories are based in the southern part of China, Lee explained.
Meanwhile, shipments of components from the mainland to Taiwan and South Korea will be affected too, but this still depends on whether factory operations will fully resume in the first quarter, Lee said.
The benchmark Hang Seng Index ended trade 1.54 percent lower on Tuesday at 27,539.2. It at one point fell 463 points. The Hang Seng China Enterprises (H-share) Index dropped 152.69 points, or 1.39 percent, to close at 10,805.15.
Market turnover was HK$101.38 billion on the main board.
