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Shares of HTC rebound on Q3 hopes

Shares of HTC rebound on Q3 hopes

Taipei, June 17 (CNA) Shares of Taiwan-based smartphone vendor HTC Corp. staged a technical rebound Wednesday morning as investors were motivated by the company's expectations that its operations will improve in the third quarter of this year before Apple Inc. unveils new iPhones, dealers said.
However, whether the momentum of HTC shares will continue depends on whether the smartphone vendor can come up with real numbers to show a breakthrough in its bottom line after it warned that it would incur an almost NT$10 (US$0.32) loss per share in the second quarter of this year, they said.
As of 11: 13 a.m., shares of HTC had added 2.67 percent to NT$80.80 with 10.87 million shares changing hands, recovering from a 5.86 percent fall Tuesday. The weighted index on the Taiwan Stock Exchange was down 0.02 percent at 9,214.96.
"The stock had suffered heavy losses since it warned (on June 5) that it could post heavy losses in the April-June period. So, many bargain hunters simply seized any positive leads to take advantage of its low valuation for the moment," Taishin Securities Investment Advisory analyst Tony Huang said.
On June 5, HTC issued a profit warning that it could incur a loss per share of NT$9.7-NT$9.94 for the April-June period after booking large losses in asset impairment and encountering slower-than-expected sales in the huge China market. The forecast represented a downward revision from its earlier projection of NT$0.06-NT$0.34 in earnings per share.
Since the profit warning, shares of HTC had fallen more than 15 percent before Wednesday's rebound.
The stock regained momentum when the local main board opened Wednesday after HTC issued a statement Tuesday. In the statement, Jack Tong, president of HTC North Asia, said that his company has high hopes that it will be able to see its sales growth pick up in the third quarter, when replacement waves of the iPhone 6 and iPhone 6 Plus, the latest Apple' iPhone models, fades.
Tong said that by seizing the vacuum of new iPhones as an opportunity, HTC will make efforts to push up sales of its high-end models, such as the HTC M9, the HTC M9+, and the HTC E9+ in the July-September period. The market has widely anticipated that Apple will not launch its new iPhone model until September.
In the statement, HTC said that its mid-range Desire series took the position as the top seller in Taiwan for the third consecutive month in May. In addition, sales of its Desire family have topped 1 million units in its home market over the past year as the company has invested more in the mid-tier market.
Tong said that Desire model sales data showed a victory for HTC, and the company has faith that it can duplicate this success in Taiwan in other markets.
"I think the negative impact resulting from the profit warning has been digested in the market to a large extent. That's why the stock bounced back in the wake of these positive leads," Huang said. "But, how far the rebound of HTC shares will go will be up to whether it can give real numbers to convince investors."
After the release of the profit warning, several foreign institutional investors cut their target prices on HTC shares. A European brokerage has even lowered its target price from NT$100 to NT$52, the lowest among the foreign brokerages which track the stock so far. (By Esme Jiang and Frances Huang)


Updated : 2021-09-17 06:34 GMT+08:00