iPhone 12 to Be Released in October-November
The author is an analyst of KB Securities. He can be reached at jeff.kim@kbfg.com. -- Ed.
iPhone 12 to be released one to two months later than previous models
Apple will unveil its iPhone 12 via an online event and roll out the smartphone in October-November, which would be one to two months later than previous models (Yonhap News, July 14). The delay is attributable to pandemic-induced disruptions in global parts supplies and the need for more testing.
Modest earnings seasonality for parts vendors
Previous iPhone unveilings over the past five years involved drops in the share prices of iPhone parts vendors after peaks in August-September (iPhones usually launch in September), as concerns about third quarter earnings lured investors to sell. Earnings and stock performance in 2020 will differ from those of previous years; earnings forecasts for iPhone parts vendors remain unfazed by Apple’s multi-model strategy and delayed iPhone 12 release, while (1) earnings are expected to peak in 4Q20 given that parts production for the two high-end iPhone variants will begin in September; and (2) 1Q21 earnings are estimated to grow significantly YoY.
More specifically, LG Innotek should post an all-time quarterly high in OP in 4Q20, beating its 4Q19 OP of KRW209.3bn by a large margin. ITM Semiconductor/BH 4Q20 OP are forecast at KRW34.8bn (+150% YoY)/KRW45.0bn (+278% YoY). The relatively modest earnings seasonality will provide positive stock momentum for LG Innotek, ITM Semiconductor and BH, which are key Apple vendors.