Stifel analyst, Aaron Rakers, published a report highlighting two key pieces of information for Apple (NASDAQ: AAPL) in a note this morning: November monthly sales results from Apple's largest iPhone manufacturers – Hon Hai Precision (Foxconn) and Pegatron and this week's China mobile phone export data for November. The conclusion is that Apple is likely to show 4-5% upside to current iPhone numbers, a belief not held by many on the sell side.

Hon Hai has three manufacturing operations for Apple's iPhone – the largest being the company’s manufacturing in Zhengzhou in the Henan Province, China (estimated to be +70% of iPhone production). Hon Hai does have an iPhone manufacturing facility in Sao Paulo, Brazil. Pegatron manufactures iPhones out of two facilities, we believe the largest being located in the Pu Dong New District, Shanghai, China.

Hon Hai (Foxconn) + Pegatron reported November sales declined 6% m/m and represent only a 1% y/y increase (vs. +15% y/y in October). According to Raker, this monthly decline compares to a combined increase of +15%, +16%, and +7.5% for November in 2012, 2013, and 2014, respectively (average at +7% m/m over the prior 5-years).. With October + November accounting for on average 65.2% of total C4Q revenue over the past 5 years (range: 63.8%-66.4%), he finds the implied combined Hon Hai (Foxconn) + Pegatron sales up 9% y/y and +47% sequentially for the December 2015 quarter.

The analyst believes that the combined quarterly revenue for Hon Hai (Foxconn) + Pegatron has exhibited a relatively high historical correlation when compared to Apple’s total revenue, excluding services revenue (R2 = 0.86). While the decline in November could be consider a negative data point (vs. historical trends), note that the historical correlation would imply total Apple sales (ex-services) of $74.1 billion, an implied ~4%-5% upside to expectations.

Tracking of China total mobile phone exports out of China found November exports increased 3% y/y; down 2.5% m/m. This compares to the 11% y/y and 30% m/m growth seen during the month of October. This leaves total October + November mobile exports growing 7.1% y/y, which compares to a 7.4% y/y increase in C3Q15. October + November has accounted for an average of 66% of total calendar fourth quarter mobile exports. (historical R2 = 0.92 vs. iPhone, ex-China, shipments)

China mobile phone exports have a historically high correlation with total ex-China iPhone shipments (R2 = 0.922). Using the historical October + November contributions, Raker arrived at an implied China mobile phone export growth of 3% y/y in the December quarter. The historical correlation would leave imply approximately 64.5 million ex-China iPhone shipments – supportive of Raker's current 74.7 million estimate.

No change to Buy rating or $150 Price Target.

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For an analyst ratings summary and ratings history on Apple click here. For more ratings news on Apple click here.

Shares of Apple closed at $115.62 yesterday.