Understanding the Market | FIT HON TENG falls over 5%, Hon Hai's November revenue is weak, and the market worries that AI demand may not offset Apple's sluggish performance
FIT HON TENG's stock price fell over 5%, reporting HKD 3.22 as of the time of writing, with a trading volume of HKD 26.0128 million. Hon Hai announced a revenue of NT$ 672.6 billion for November 2024, a decrease of 16.43% month-on-month and an increase of 3.47% year-on-year. The market is concerned that AI demand cannot offset weak iPhone sales, with Apple's business accounting for over 50% of Hon Hai Precision's total sales. Executives expect that by 2025, cloud business sales will be comparable to mobile business sales
According to Zhitong Finance APP, FIT HON TENG (06088) is currently down over 5%, with a drop of 5.01% as of the time of writing, priced at HKD 3.22, with a transaction volume of HKD 26.0128 million.
In terms of news, on December 5th, Hon Hai announced that its revenue for November 2024 was NT$ 672.6 billion, a decrease of 16.43% month-on-month and an increase of 3.47% year-on-year, marking the second-highest for the same period in history. Data shows that Hon Hai Precision's sales in October increased by 8.6% year-on-year, but the year-on-year growth for these two months was below analysts' expected growth trajectory of 13% for this quarter. The market is concerned that the demand for artificial intelligence infrastructure may not offset the impact of weak iPhone sales.
It is noteworthy that since the launch of ChatGPT, Hon Hai Precision and other AI hardware suppliers have benefited from large technology companies like Meta and Alphabet's Google making substantial expenditures on servers and data centers. However, investors are beginning to question whether these expenditures will yield returns, and Apple's iPhone sales performance is expected to be mediocre this year. Historical data shows that Apple's business accounts for more than 50% of Hon Hai Precision's total sales. Hon Hai Precision executives stated in the latest earnings call that they expect sales from cloud services, including artificial intelligence servers, to be roughly comparable to mobile phone business by 2025