Apple has ‘manageable but significant’ exposure to latest China COVID lockdowns – analyst

Apple investors have a new concern: lockdowns in response to rising COVID-19 cases in key manufacturing areas in China could negatively impact production.

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Chris Ciaccia for Seeking Alpha:

Bank of America analyst Wamsi Mohan, who has a buy rating and a $215 price target, noted that Apple has a “manageable but significant” exposure to Shenzhen, where Foxconn has a manufacturing plant, calling it “a hub for a material part of the iPhone supply chain.”

“Apple/Foxconn have the ability to relocate production to other areas in the short term provided that there is not a significantly higher duration of lockdown,” Mohan wrote in a note to clients.

Mohan also pointed out that other sites in China could pick up some of the shortfall, as nearly 50% of iPhone production occurs in Zhengzhou in China’s Henan province.

MacDailyNews Take: After hitting $150.10, but never dipping below $150 ☹️ in Monday trading, shares of Apple in pre-market trading on Tuesday are up $0.68 (+0.45%) to $151.30.

Hopefully not all of the skittish AAPL money has been flushed and the share price can still dip below $150 at some point prior to Q222 earnings and the capital returns update coming in late April.

And, BTW, memo to China: There’s no such thing as zero-COVID. Duh.

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    1. The fires were mostly peaceful, too, over the course of months. There were only billions in damages, mostly peaceful though. Jan 6 wasn’t peaceful though, and there were no unpeaceful agitators or feds In the crowd. There does have to be tolerance though except for ideas or people the most peaceful protest crowd doesn’t like.

  1. Apple navigated CV19, parts shortages, and employee problems BEFORE there was any vaccines and limited to non-existent medical protocols…..and BEAT expectations in the Quarter….

    This current shutdown will be navigated as well…

  2. Regardless of the new COVID outbreaks, the Chinese authorities have overall handled the pandemic in their nation pointedly. Watching the little amount of news feed allowed to leave the nation in Autumn 2019, I was somewhat amused by TV images of some citizens being literally dragged — a few even invertedly by their legs! — back into their residences to help contain viral transmission.

    As the months passed and Covid-19 became a global pandemic, I couldn’t help but notice how China’s strict handling of its own outbreak, while allowing little rights and freedoms to its people (and maybe even internal/external big business), likely enabled a relatively short duration of its initial crisis.

    Perhaps with greater democratic freedom can come weaker national security, and vice versa. While I wouldn’t exchange my (Western) freedom for such national security, it is still foolish to pretend a national-security sacrifice isn’t being made.

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