Cellphone maker Compal Communications Inc (華寶通訊) rose to the highest in 11 months in Taipei trading after it was upgraded by Macquarie Group Ltd and Goldman Sachs Group Inc.
The stock gained 6.9 percent to NT$34.85 at the close, the highest since Oct. 6 last year on the Taiwan stock exchange today.
The benchmark TAIEX index added 1 percent.
“Finally, it’s Compal Communication’s turn,” wrote Robert Chen, an analyst at Goldman Sachs, who raised the company to “buy” from “neutral” and increased the price target by 32 percent to NT$35, adding that the company’s business may be boosted by Palm Inc’s smartphone project.
Chen said he expected Compal’s fourth-quarter sales to grow 80 percent from the previous three months ended Sept. 30.
The company was upgraded to “outperform” from “underperform” at Macquarie Group, which said business opportunities for smartphone contract manufacturers are emerging as the handsets become cheaper.
Palm’s second smartphone, using its new mobile operating system WebOS, will bring NT$3 billion (US$92.3 million) in revenue to Compal in the fourth quarter, Lu Chia-lin (呂家霖), the analyst at Macquarie, said in a report yesterday.
“We know that Compal Communications has been disappointing investors for a long time, but we have done lots of checks and feel very confident that this time Palm’s order will be very significant to Compal,” Lu wrote.
He raised the company’s price estimate by 95 percent to NT$37.
Compal’s operations were affected after Motorola Inc, its biggest customer, “lost its way,” Chen wrote in his note.
Palm hasn’t said how many Pre smartphones have been sold in the US since it introduced the new model on June 6.
The company may have sold about 350,000 by the end of last month, said Ilya Grozovsky, an analyst with Morgan Joseph & Co in New York.
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