Shares of smartphone vendor HTC Corp (宏達電) staged a strong rebound amid heavy trading yesterday as bargain hunters rushed to buy the stock to take advantage of its relatively low valuation, dealers said.
HTC shares rose by the maximum daily limit of 7 percent to close at NT$145.50, while the TAIEX closed up 0.24 percent at 8,413.72 points.
In the early session, buying in the stock was sparked by media reports that China Mobile Ltd (中國移動), the world’s biggest wireless carrier by number of users, was planning to buy a stake in HTC and inject funds into the Taiwanese company.
Despite HTC issuing a statement denying the report, buying interest remained strong and maintained its momentum until the end of the session.
In addition to the speculation on a stake acquisition by China Mobile, local media said that HTC is to launch a new model tailored for the Chinese company’s subscribers next month. This report was also denied by HTC.
That denial came after the smartphone vendor on Wednesday dismissed media reports that it has shut down some of its production lines and is outsourcing a portion of its manufacturing because of weakening cash flow.
The company has halted at least one of its four major production lines, cutting its total capacity by 20 percent, Reuters News reported on Wednesday, citing sources with direct knowledge of the situation.
“HTC is not shutting down, nor does it have plans to sell any of its factory assets,” HTC said in a filing to the Taiwan Stock Exchange.
“HTC has a strong cash position and financial structure, and will provide its latest financials in our upcoming earnings call to investors and the broader community,” it added.
The Taoyuan-based company earlier this month reported a net loss of NT$2.97 billion (US$101.1 million), or NT$3.58 per share, for the third quarter, its first quarterly loss since listing on the main board in March 2002.
The company’s global market share dropped to 2.6 percent last quarter from a peak of 10.3 percent in the third quarter of 2011.
At an internal meeting with employees on Tuesday, HTC chief executive Peter Chou (周永明) said manufacturing remains an important part of the company’s aim of ensuring good quality, but added that it was open to seeking cooperation with other firms, without elaborating.
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