Chinese AirPods maker soars on deal to assemble iPhone amid trade tensions

Luxshare Precision Industry Co. surged as much as 7% after clinching a deal to become the first mainland Chinese company to assemble Apple Inc.’s iPhone at the height of Washington-Beijing tensions.

Luxshare gained the most in about two weeks on an intraday basis after agreeing to pay about $470 million for Wistron Corp.’s iPhone production in China. It’s a win for Luxshare, which like other contract manufacturers has long sought to join Hon Hai Precision Industry Co. and Pegatron Corp. in assembling Apple’s iconic device. On Monday, CICC lifted its target price on Luxshare by about 16%.

Wistron slid as much as 10% in Taipei, while Pegatron and Hon Hai fell more than 3%. Luxshare produces accessories from cables and chargers to antennas but is also the world’s biggest manufacturer of AirPods—a lucrative business that helped the company become one of Asia’s top stock performers in 2019. Apple in turn has sought a mainland Chinese partner in part to broaden local sources during a trade war.

The deal is slated for completion by year’s end pending regulatory approval. Taiwan-based Wistron agreed to sell two subsidiaries in eastern China for 3.3 billion yuan. One of those units, based in the city of Kunshan, is Wistron’s sole iPhone manufacturing site, according to people familiar with the company’s business.