Shares of HTC Corp (宏達電), the world’s leading maker of smartphones running on the Windows Mobile and Android platforms, are likely to rise at least 36 percent over the next 12 months because its new product lineup could further increase market share and boost profits, Goldman Sachs said yesterday.
In a note to its clients yesterday, the US brokerage raised its target price for the stock to NT$1,000, which is NT$200 more than its previous estimate of NT$800 for HTC and represents a 36.61-percent upside from the stock’s closing price of NT$732 in Taipei trading yesterday.
The brokerage’s new target price on HTC compared with UBS’ NT$882, Bank of America Merrill Lynch’s NT$830, Morgan Stanley’s NT$820, and NT$710 at BNP Paribas.
Goldman Sachs became the first foreign brokerage to raise the target price on HTC after the Taiwanese company unveiled two Android-based smartphones — HTC Desire HD and HTC Desire Z — in London on Wednesday, while chief executive officer Peter Chou (周永明) offered an optimistic outlook for the fourth quarter.
“We believe its new product portfolios will allow the company to maintain its technology leadership, sustain its value proposition and significantly raise its brand awareness in the competitive smartphone market for at least the next one to two years,” Goldman Sachs analyst Robert Chen (陳柏宇) said in the note.
Global market research firm Gartner has estimated global smartphone shipments will increase by 48.2 percent this year from last year and see another 46.9 percent growth next year on rising market demand.
Shipments of Android-based devices surpassed those of the iPhone in the second quarter, while HTC accounted for half of all Android devices shipped in the first quarter, BNP Paribas said on Monday.
Chen said he expected HTC to maintain robust growth in revenue in the fourth quarter and become a top-five global handset maker, given the company’s other new models are in the pipeline including a Windows Phone 7 (WP7) smartphone next month.
He said the planned introduction of the WP7 would not only allow HTC to become a tier-1 smartphone partner for the world’s major operators, but also pave the way for the company to further cooperate with US telecoms operator Verizon Wireless to present a new smartphone model next year based on 4G technology, known as Long Term Evolution (LTE).
Goldman Sachs, which maintained HTC on its “buy” list in Asia-Pacific coverage, forecast the company’s earnings per share to reach NT$47.55 this year, NT$74.47 next year and NT$91.53 in 2012 on expectations of higher shipments.
Shipments by HTC will reach 24.2 million units this year, up 107 percent from last year, BNP said.