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Goldman Analyst Under Investigation Was Known For Apple Supplier Calls

By Lorraine Luk

In Taiwan, Henry King, the Goldman Sachs analyst under investigation in the U.S. government’s broad insider-trading probe, was highly regarded and his calls were widely followed.

Bloomberg News

King, the head of Taiwan research at Goldman, was especially well known for his prescient calls on suppliers for Apple., including contract manufacturer Hon Hai Precision Industry Co. as well as personal computer makers Acer and Asustek Computer.

“He is well connected in Taiwan tech industry. Investors and local media always regard his estimates as market consensus because of his strong track record in making predictions on earnings and product roadmap,” said a hedge fund manager who declined to be named.

A Taipei-based fund manager said King, a frequent winner of top analyst awards, was the first one who identified the growth potential of metal casing supplier Catcher Technology, which makes casing for Apple’s MacBooks  and HTC Corp.’s handsets. The stock has risen 56% since the start of this year while the benchmark Taiex was up 13% in the same period.

The criminal probe is tied to the long-running insider trading case involving hedge fund Galleon Group. Criminal authorities are investigating whether King leaked inside information to hedge funds, adding a new angle to a broadening insider-trading probe, people close to the situation say.

The development takes the insider-trading investigation inside the research operation of a major Wall Street firm for the first time.

Another investment manager in Taiwan also said King pointed out the concerns over Acer’s product development capability and its PC sales in the U.S. and European market as early as 2010 when the Taiwanese PC maker still reported strong earnings.

Among his coverage, Acer is the only company that has a sell rating as he thinks the stock is expensive and it will see a slow but steady recovery. An Acer spokesman said they won’t complain about an analyst’s report unless it has inaccurate or misleading information.

For the giant contract manufacturer Hon Hai, he has a neutral rating. He has lowered his fourth-quarter iPad forecasts to 11.6 million units from 15.4 million units due to demand slowdown ahead of the anticipated launch of iPad 3 launch in late first-quarter or early second quarter.

King diverted all his incoming mobile calls to voice mail. He couldn’t be reached for comment. Goldman and U.S. government authorities would not comment.

In 2006, King was ranked as the No. 1 sector analyst in Institutional Investor and No. 2 sector analyst in Asiamoney. Prior to this, King worked for CSFB and Indosuez WI Carr, where he initiated and maintained the Asian Motherboard Monitor and the Motherboard Weekly Tracking Demand, respectively. These signature products were also published at Goldman Sachs until 2004.

His work experience also includes positions as head of Research at IDC Taiwan and technology analyst at Ting Kong Securities, focusing on PC hardware and component companies. King received a BS degree in Electrical Engineering from the National Central University in Taiwan and an MBA with distinction from Loyola University of Chicago.

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