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HTC shares forecast to test NT$200 soon on sales decline

HTC shares forecast to test NT$200 soon on sales decline

Taipei, Oct. 30 (CNA) Shares of Taiwan-based smartphone vendor HTC Corp. may soon test the technical support point of NT$200 (US$6.82) amid lingering concerns over its falling sales in the global market, dealers said Tuesday. "After the share price slump seen in the past two trading sessions, the stock has become technically fragile," Hua Nan Securities analyst Stan Chang said. "Shocked by the company's grim fourth quarter sales forecast, investors are likely to continue to cut their holdings in HTC shares." "I think HTC shares will test the nearest support point of NT$200 tomorrow as selling orders on the stock are piling up," Chang said. Shares of HTC fell 7 percent, the maximum daily decline, to close at NT$204.50 Tuesday, with 4.01 million shares changing hands on the Taiwan Stock Exchange. The benchmark weighted index ended up 1.28 percent, at 7,182.59 points. Soon after the local bourse opened, HTC shares encountered heavy selling, extending from the previous trading session, and remained weak throughout the trade. HTC shares have dropped more than 13 percent in the past two sessions since its lower sales forecast for the fourth quarter. The company said it expects its consolidated sales to fall from NT$70.2 billion in the third quarter to NT$60 billion in the fourth. It has also projected a quarterly decline in its operating margin for the fourth quarter, from 7 percent to 1 percent. HTC said its fourth quarter gross margin is expected to drop from 25 percent to 23 percent. "Many foreign institutional investors are pessimistic about HTC's sales because of its shrinking share of the global market," Chang said. HTC shipped 7.3 million smartphones worldwide in the third quarter, down from 8.8 million units in the second quarter, according to International Data Corp. In the third quarter, the company fell from the fourth place to the fifth as the largest smartphone vendor in the world, with its market share showing a quarterly drop from 5.7 percent 4.0 percent, IDC said. Among the foreign brokerages that have reduced their target prices on HTC shares, J.P Morgan Chase made the biggest cut, from NT$160 to NT$100. "Unless HTC comes up with something to prop up its share price, the stock is unlikely to reverse its current downside," Chang said, mentioning a share buyback program as one possibility. (By Stacy Wu and Frances Huang)


Updated : 2021-07-24 09:44 GMT+08:00