Apple Supplier GoerTek Dives for Second Consecutive Day
10 Novembre 2022 - 05:35AM
Dow Jones News
By Yifan Wang
Shares of Apple Inc. supplier GoerTek Inc. dived for the second
straight day, after the Chinese electronics maker said an overseas
major client has asked to stop a product's production. Now,
investors are worried if more order termination would be coming,
analysts say.
The stock has tumbled 10% on Thursday, the largest one-day
fluctuation allowed on the Shenzhen stock exchange. That came on
top of another 10% slump on Wednesday.
The selloff came after GoerTek said it has received notification
from an "overseas major customer" asking it to suspend the
production of a smart acoustic product, which analysts believe to
be Apple's AirPods Pro 2. The company expects the order pause to
cut its 2022 revenue by up to 3.3 billion yuan (US$455.7 million).
Other orders for the client are ongoing normally, GoerTek said.
While the estimated revenue reduction only makes up 4.2% of
GoerTek's annual sales, the order pause has left investors asking
what's next. "The bigger market concern is whether the impact would
extend to other products with the same customer, and the
implications regarding Goertek's capabilities," Jefferies analysts
led by Nick Cheng said in a note. The bank estimates that Apple has
contributed nearly a half of Goertek's total revenue last year.
The suspension may also make it harder for GoerTek to win new
orders. "It may lower the possibility or postpone the timing of a
new wearable [device] project win," said Daiwa analysts Kylie Huang
and Wayne Lin.
Both Daiwa and Jefferies analysts believe that GoerTek is still
working with Apple to resolve the suspension, which their industry
checks suggest is a result of technical production problems. Daiwa
reckons GoerTek may be able to resume normal production of the
product in the second half of 2023.
"We will closely monitor whether GoerTek successfully fixes this
issue in the next two weeks," Jefferies said.
Write to Yifan Wang at yifan.wang@wsj.com
(END) Dow Jones Newswires
November 09, 2022 23:20 ET (04:20 GMT)
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