Shares of Taiwan-based smartphone brand HTC Corp (宏達電) took a beating yesterday morning after the company’s sales last month fell to an 11-year low amid escalating competition in the global smartphone market, dealers said.
Judging from HTC’s sales performance in the first quarter of this year, many investors feared that the company would report a net loss for the three-month period and rushed to dump the stock soon after the local equity market opened, the dealers said.
HTC shares plunged 8.32 percent to NT$79.3 yesterday, under-performing the TAIEX, which was down 0.8 percent.
“Look at the current large turnover. The panic-driven selling showed investors’ big disappointment with HTC’s sales,” Hua Nan Securities Co (華南永昌證券) analyst Kevin Su (蘇俊宏) said. “HTC remains haunted by stiff competition in the global smartphone market at a time when the market has been saturated.”
According to a recent Gartner report, worldwide smartphone sales for this year are expected to grow only 7 percent, marking the first year for the handheld devices to post only a single-digit percentage increase.
The slower growth has made competition more pressing for HTC, Su said.
As a result, HTC on Wednesday reported that it posted NT$4.14 billion (US$127.77 million) in consolidated sales for last month, down 1.4 percent from a month earlier and down 79.3 percent from a year earlier.
In the first quarter, HTC’s consolidated sales fell 64.31 percent from a year earlier to NT$14.82 billion. In the first two months of this year, HTC recorded a net loss of NT$0.48 per share, although it recorded profits from the disposal of land and building properties located in Taoyuan to offset the adverse impact resulting from the slowing smartphone operations.
“So, the March sales told the market that it could incur a loss for the entire first quarter. Such worries prompted many investors to cut their holdings,” Su said.
The Economic Daily yesterday forecast that HTC would report a net loss of more than NT$2 per share for the January-March period.
“Although HTC has unveiled its first virtual reality headset, the HTC Vive, it is still too early to say whether and how the new device will help the smartphone vendor reverse its current slow business,” Su said.
“Before the real number of HTC Vive sales comes out, many investors have been avoiding the stock,” Su said.
Su said that foreign institutional investors stood on the sell side in recent sessions, showing their caution about HTC’s bottom line.
Su said foreign institutional investors sold a net 15.18 million HTC shares in the past five trading sessions.
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