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Apple Still Growing In China Despite Market Slowdown, Analyst Says

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In a report published Friday, CLSA Americas analysts maintained a Buy rating on Apple Inc (NASDAQ: AAPL), with a price target of $163.

Apple's 1Q15 China volume surged 73 percent y/y to 13.5m units, despite the quarter being one that faced difficult comps from the launch of China Mobile in January 2014. Apple gained the most market share in the quarter, up 430bps y/y.

In the report CLSA Americas noted, "We expect branded smartphone growth in China to slow to 9.8% in 2015 and 6.9% in 2016, which is already wreaking havoc in parts of the China smartphone supply chain. As Apple's market share in China stands at only ~10% today, the prospects for a 500bp market-share increase over time (a nice round number off a low base) would yield 35% upside to our China iPhone forecast for Apple in FY17 (20m unit upside)."

The analysts pointed out, however, that such an approach does not fully consider the large market for low-end smartphones sold in China.

The smartphone industry estimates for 2015 and 2016 have been reduced by 2.1 percent and 2.7 percent, respectively. "Despite this, we leave our iPhone estimates basically unchanged (higher in FY17) as we now expect Apple's market share in China to continue its ascent," the analysts added.

Latest Ratings for AAPL

Apr 2018Monness Crespi HardtInitiates Coverage OnBuy
Mar 2018BarclaysMaintainsEqual-WeightEqual-Weight
Feb 2018Raymond JamesReinstatesMarket Perform

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Posted-In: CLSA Americas VetrAnalyst Color Reiteration Analyst Ratings


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