(Yicai Global) July 13 -- Shares of Lingyi iTech Manufacturing slumped to an almost two-year low after the leading Apple supplier said first-half profit likely fell.

Lingyi iTech’s stock price [SHE:002600] dropped as much as 9.6 percent before ending today 6.4 percent down at CNY7.70 (USD1.19), the lowest since August 2019. Yesterday, the shares plunged by the 10 percent daily trading limit.

Net profit was probably between CNY363 million and CNY463 million (USD56.1 million and USD71.6 million) in the six months ended June 30, the Guangdong province-based firm said in a statement on July 11. That represents a 26.7 percent to 42 percent slide from the same period a year earlier.

Since the company had a first-quarter profit of CNY463 million, it likely lost money in the second quarter.

A slowdown in domestic orders due to the shortage of chips for smartphones and a halt to production at overseas factories caused by the pandemic were the main factors behind the earnings decline, Lingyi iTech said. Some of the company’s projects are also still in their initial, investment or construction phases.

Investors have probably long anticipated a weaker performance, as Lingyi iTech’s stock price began to slide after reaching a record high of CNY14.88 last December. The shares are down 36 percent so far this year.

Not Alone

Lingyi iTech is not the only Chinese supplier to Apple that has been flagging up a weaker first half. Luxshare Precision Industry, also based in Guangdong, estimated a gain of just 15 percent to 30 percent in net profit, the slowest growth since the third quarter of 2018. Its stock has fallen 23 percent since the start of the year.

Shares of seven registered Apple suppliers including Lingyi iTech, Luxshare, Shenzhen Everwin Precision Technology, Suzhou Dongshan Precision Manufacturing and Lens Technology have all retreated more than 40 percent this year from highs, per statistics from data provider Wind Information.

“Investors have different expectations on the outlook for Apple suppliers’ stocks because of multiple factors such as the chip shortage, unclear downstream demand, and temporary shutdown of overseas factories,” a technology, media and telecoms analyst told Yicai Global. “They prefer to invest in chip and new energy vehicle stocks which are more certain to grow.”

The pickup in demand post pandemic is likely to boost the market share of iPhones, the analyst said, adding that the new model to be released in September will lift the stock prices of Apple suppliers.

Editors: Tang Shihua, Futura Costaglione