HTC Corp’s (宏達電) share prices fell beneath the key psychological level of NT$1,000 yesterday as fears over the smartphone maker’s components inventory and shipment outlook continued to weigh on investor sentiment.
Shares were down 6.82 percent to NT$997 on the Taiwan Stock Exchange, the stock’s lowest level since March 15, even though the company offered shareholders a positive outlook for the second half of this year at its annual general meeting on Wednesday.
HTC fell in four of the past five sessions since the company was removed from Goldman Sachs Group Inc’s “Conviction Buy List” on Friday last week, citing intensifying competition in both smartphone and tablet markets. On Tuesday, Macquarie Research analyst Daniel Chang (張博淇) downgraded HTC from “outperform” to “neutral” and cut the target price to NT$1,140 from NT$1,500.
However, Samsung Securities analyst Lu Chia-ling (呂家霖) said yesterday in a note that there was no need for investors to panic over HTC’s recent component order cuts, labeling it “a false alarm.”
Based on Samsung Securities recent supply-chain checks, HTC has cut the orders of certain -components such as crystals, any-layer HDI PCB and some passive components by 10 percent to 15 percent, but has not made across-the-board cuts on all components.
“We highlight that the reduced orders are still of a decent size, which are slightly above our forecasts,” Lu wrote in the note. “We believe those order reductions are a result of over-booking after the Japan earthquake on top of a more aggressive procurement policy launched earlier this year.”
Samsung Securities rated HTC a “buy,” with a target price of NT$1,430.
On Wednesday, Barclays -Capital also wrote that -recent market concerns over HTC’s component order cuts were overblown.
“HTC is adjusting its inventories to a reasonable level and this adjustment has been misinterpreted by the market as a sign of weaker fundamentals,” Barclays said.
The brokerage maintained its “overweight” rating on HTC with a target price of NT$1,650.
So far this week, HTC has dropped 20.24 percent on the local bourse, compared with a 3.85 percent fall on the TAIEX. Since the beginning of the year, the stock has advanced 10.78 percent versus a decline of 3.54 percent on the TAIEX.
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