Wed, Jun 13, 2012 - Page 12 News List

HTC Corp reassures shareholders about direction, plans to expand new markets

By George Liao  /  Staff reporter

Faced with disappointed shareholders following a slew of bad news, smartphone maker HTC Corp (宏達電) yesterday said it would dedicate more effort to research and innovation, and strengthen integration of its marketing channels in China.

“The company has faced great challenges,” local cable TV network UBN quoted HTC chairwoman Cher Wang (王雪紅) as saying. “We will work harder for a breakthrough in order to create more value for shareholders.”

She said the company was still walking in the “right” direction, as the company held its annual shareholders’ meeting in Taoyuan amidst a torrential downpour that has ravaged the country in the last few days.

Saying that today is the company’s 15th anniversary and the celebration is taking place in a newly inaugurated 17-story building in Taipei, Wang added that more than half of the building has been allocated to research and development.

This is an indication that HTC is paying extra attention to research and innovation, she said.

“The direction HTC has been taking is [the] right [one] and the company is undergoing a transition period to a new phase,” HTC chief executive officer Peter Chou (周永明) told shareholders.

He said HTC had been doing well in emerging markets such as China, and would strengthen integration of its marketing channels there in hopes that China would yield excellent results in the second half of the year.

Both Wang and Chou’s remarks came in the wake of HTC’s stock price falling by the daily limit of 7 percent for two days in a row last week, reaching its lowest level in more than two years, after the company adjusted down its second-quarter revenue target to NT$91 billion, 13 percent less than its previous estimate of NT$105 billion.

The company’s downward adjustment followed a weaker-than-expected consolidated revenue of NT$30 billion for last month, down from NT$31.03 billion the previous month. Cumulative revenue of NT$128.8 billion for the first five months was also down 29.81 percent year-on-year.

“The revised revenue is due to lower-than-anticipated sales in Europe and delayed shipments following the launch of certain products in the US,” the company said.

HTC’s share price has dropped 73.5 percent from a high of NT$1,300 in April last year to close at NT$345 in Taipei trading yesterday.

A shareholder complained about HTC’s plummeting stock price and asked the company to increase its cash dividends.

In response, Chou said HTC had given a total of NT$120 billion in cash dividends to shareholders in the last four to five years, which is higher than other Taiwanese companies.

Yesterday, shareholders approved the company’s plan to distribute a cash dividend of NT$40 per share, based on NT$62 billion in net profit, or earnings per share of NT$73.32, and NT$465.8 billion in revenue.

Other shareholders questioned the company’s US$300 million acquisition of California-based S3 Graphics Co, announced in July last year. S3 Graphics is an affiliate of VIA Technologies Inc (威盛電子), which was founded by Wang and and her husband, Chen Wen-chi (陳文琦), in 1987.

HTC general counsel Grace Lei (雷憶瑜) said the company still aimed to complete the acquisition of S3, which owns 270 patents, that multinational companies such as Sony Corp and Microsoft Corp utilize and pay royalties for.

S3 Graphics’ suing of Apple in the US for violating its patents was fruitless, as the US International Trade Commission’s ruling in November last year indicated that Apple did not violate S3 Graphics’ patents.

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