Huatai Securities: Apple's Q2 tariff impact is less than expected, but sustainability is in doubt

Zhitong
2025.05.03 09:30
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Huatai Securities analysts pointed out that Apple's tariff impact in the April to June quarter was $900 million, with major sales products shipping from India and Vietnam. However, the impact from July to September may be greater, as the iPhone 17 is still expected to ship from China. Cook did not disclose whether there would be a price increase. Huatai Securities recommends paying attention to investment opportunities in the Indian-related industrial chain, domestic industrial chain, Taiwanese-funded enterprises, and related funds

According to the Zhitong Finance APP, during the earnings call held overnight, Apple (AAPL.US) CEO Tim Cook pointed out that in the April to June quarter, tariffs impacted USD 900 million (3.6% of net profit), and most products sold in the U.S. will be shipped from India and Vietnam, progressing faster than expected, but he refused to comment on the impact for July to September. Huatai Securities technology analysts believe that considering that India still lacks initial mass production capabilities, if the current tariffs persist, the iPhone 17, which is set to be released in September, will still need to be shipped from China in its early stages, thus the impact for July to September will be several times greater than USD 900 million.

Cook estimated that tariffs will lead to an additional cost of USD 900 million, approximately RMB 6.54 billion, for the company's third fiscal quarter (April to June). However, he declined to disclose whether prices would increase or if costs would be passed on to consumers. Huatai Securities believes that investment opportunities can be focused on the following four aspects:

  1. Buy into the Indian-related industrial chain to enjoy structural returns, such as Dixon (current price-to-earnings ratio of about 70 times).
  2. Buy domestic industrial chains that have significantly corrected in stock price but are difficult to replace in the short term, such as AAC Technologies.
  3. Buy Taiwanese enterprises listed on A-shares, such as Hon Hai Precision Industry.
  4. Pay attention to related funds such as ICBC and Manulife India ETFs, and BlackRock India ETF
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