Slower iPhone sales minimal impact on Malaysian tech stocks, says AmInvestment

Pay pal: The service would allow users to transfer money from their checking accounts through Apple devices.

KUALA LUMPUR : Concerns of slowing shipments of Apple Inc’s iPhone 6 is not expected to significantly impact Malaysian players such as Inari Amertron Bhd and Malaysian Pacific Industries Bhd (MPI), said AmInvestment Bank Bhd.

The research house said on Friday recent reports indicate concerns of slowing shipments of the iPhone 6 and iPhone6S which has put pressure on Apple’s share price.

This is because the iPhone, Apple’s flagship product, accounts for the vast majority of its revenue and profits.

“Given that 2016 is an even-year launch, the rumoured next generation iPhone 7 which is expected to be launched in September, is expected to incorporate significant upgrades from the iPhone 6 models, which may also be a reason for the slight overhang on iPhone 6 purchases currently,” it said.

On the other hand, Inari and MPI, which have ties to Apple via key customers in the supply chain, are benefiting from the depressed exchange rates thanks to their exporter status.

“The slowdown in iPhone sales is mitigated by the US dollar exchange rate which we have forecasted at RM4.20 to the dollar. Now is is trading at RM4.41, or a 5% deviation from our estimates,” it said.

Inari’s main customer, Avago Technologies, has experienced more demand for its radio frequency (RF) chips which has been outstripping supply, said AmInvestment.

“As for MPI, any impact should be minimal due to the fact that its revenue base is relatively diversified, with only 35% of its 2015 revenue arising from the communication segment,” said AmInvestment.