IPhone maker Hon Hai misses profit estimates in a China downturn

HON Hai Precision Industry reported a weaker-than-expected profit in the first quarter as demand for iPhones remained sluggish in China. 

The Taiwanese company reported net profit of NT$22 billion (S$918.4 million) in the March quarter, versus the average estimate for NT$29.1 billion. It previously recorded a bigger-than-expected 9.6 per cent slide in sales during the period.

Demand for iPhones fell about 27 per cent in the first three months of this year in China, according to official government data, even though Apple said its iPhone business in the Asian nation grew. 

Still, Hon Hai is getting a boost from big investments into AI infrastructure such as datacenters. Company executives said in March its AI server business could grow 40 per cent this year. That expansion has driven the stock price more than 60 per cent higher since the beginning of this year. 

Booming AI demand could help the world’s largest iPhone assembler diversify its business away from Apple, which still accounts for more than half of Hon Hai’s sales. BLOOMBERG