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Foreign brokerage trims price target for MediaTek shares

Foreign brokerage trims price target for MediaTek shares

Taipei, April 29 (CNA) A European brokerage has trimmed its price target for shares of Taiwanese chip designer MediaTek Inc.
(???) to reflect weak 3G demand in China and intensified competition from Chinese chip suppliers. In a note to clients dated April 27, the brokerage cut its estimates for MediaTek's second-quarter sales to NT$51.9 billion (US$1.7 billion) from NT$54.2 billion, citing a sharper-than-expected decline in China's 3G chip demand, pricing pressure on 3G chips and increasing product portfolios for low-end 4G chips. This will drag down MediaTek's average selling price of smartphone chips by 4 percent sequentially in the second quarter, with a falling gross profit margin to 45.5 percent, the Europe- based brokerage said. For 2015, the brokerage trimmed MediaTek's 3G handset chip shipment forecast from 266 million units to 260 million and maintained its 4G LTE chip shipment estimate at 160 million units, adjusting MediaTek's total smartphone chip shipment projection in 2015 from 426 million units to 420 million. Given these factors, the brokerage cut its price target for MediaTek shares from NT$425 to NT$405 and reduced the company's earnings per share estimates for 2015 to NT$23.5 and for 2016 to NT$27. Under Taiwanese regulations, the name of the brokerage cannot be reported because it was offering specific forecasts that could influence the market.
MediaTek shares closed up 0.38 percent at NT$400.5 Wednesday in Taipei. The company will host a conference call Thursday to release its first-quarter earnings. (By Jeffrey Wu)


Updated : 2021-09-25 00:35 GMT+08:00