Fri, Sep 02, 2005 - Page 11 News List

Investors unfazed by HTC shuffle

By Jason Tan  /  STAFF REPORTER

The recent change of top management in High Tech Computer Corp (宏達電), the nation's leading smartphone contract maker, is expected to have little impact on the firm as its performance depends on its product mix, analysts said.

"The shift in top-level executives will for sure have a negative impact on any company, but in High Tech's case, I believe the influence will be minimal," Dave Chou (周顯黎), an analyst with Yuanta Core Pacific Securities Corp (元大京華證券), told the Taipei Times in a phone interview on Wednesday.

High Tech Computer's chief executive officer (CEO) Cho Ho-tu (卓火土) announced on Tuesday that he would step down. He will become a board member, and assume the chairmanship of High Tech Computer Foundation, a public welfare organization.

Company president Peter Chou (周永明), who has worked with Cho for over 20 years, will take over the position, the firm said in a filing made to the Taiwan Stock Exchange.

High Tech Computer, which supplies smartphones for global brands such as T-Mobile International and Orange SA, was founded by Cher Wang (王雪紅), who also is chairwoman of the company. She is the daughter of business tycoon Wang Yung-ching (王永慶).

Since becoming CEO in April last year, Cho has gradually shifted responsibilities over to Chou.

Chou has built up a solid foundation for High Tech over the past year, Cho said.

However, Yuanta's Chou said the company should strive to maintain product quality, a strong research and development capability and good product mix to maintain its leading position in the industry.

He said that as the revenue contribution from its PDA lineup began to weaken in the second quarter, High Tech is now focusing on third-generation handsets, which will be shipped this quarter.

Third-generation technology is designed to provide e-mail, high-speed Internet and live sound and image broadcasts to compatible handsets.

Chou said this is a good bet as the telecommunications industry is now embracing 3G technology and High Tech Computer is on the correct track if it grabs the right timing to introduce related products.

High Tech Computer announced Tuesday that revenues totaled NT$28.69 billion (US$876 million) for the first half of the year. Its after-tax net income reached NT$4.06 billion, up 141 percent year-on-year. After-tax earnings per share (EPS) were NT$11.54.

Chou expects the company's before-tax EPS to grow 20 percent from the first six months to reach NT$13.8 for the second half, and pass the NT$25 mark for the whole year.

Another analyst was also upbeat about High Tech Computer's prospects for the remainder of this year.

"The third quarter outlook is set to be rosy for High Tech Computer, as the shipments of new phones begin in September and more customer orders pour in," said Helen Chen (陳佩君), an analyst with Polaris Securities Co (寶來證券), in a report released yesterday.

She expects the company will achieve NT$16.26 billion in revenues in the third quarter, 5.29 percent growth from the previous three months. The securities house estimates High Tech will achieve EPS of NT$23.09 for the full year.

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