FOXCONN International Holdings Ltd, the world's biggest contract maker of mobile phones, fell to the lowest in almost three years in Hong Kong trading yesterday after CLSA Ltd cut its rating on the stock to "sell."

Foxconn declined 10 percent to close at HK$6.71 (86 US cents) on the Hong Kong exchange, the lowest since August 2005. The stock has dropped 62 percent this year, making it the worst performer on the city's Hang Seng Index, which has fallen 24 percent.

CLSA cut its rating on Foxconn shares from "underperform" on concern slowing demand for handsets and rising competition from Flextronics International Ltd and BYD Co will hurt earnings. Shenzhen, south China-based Foxconn's net income may fall 13 percent to US$628 million this year, according to CLSA.

"With demand and competition headwinds, handset suppliers appear to have the technology sector's least pricing power," analysts Jenny Lai and Evonne Weng wrote in a report yesterday. The analysts cut their 12-month estimate for the stock to HK$6.20 from HK$11.80.