Smartphone maker HTC Corp (宏達電) said yesterday that it recorded its fourth consecutive monthly sales record last month on the back of strong global demand.
The company posted NT$24.61 billion (US$774 million) in sales for last month, up 126.5 percent from a year earlier and an increase of 2.58 percent from the previous month.
In the first seven months of this year, the company’s sales totaled NT$123.52 billion, up 53.61 percent year-on-year.
“Demand for smartphones remains very robust on increasing replacements of traditional cell phones,” Yuanta Securities Co (元大證券) analyst Bonnie Chang (張文慧) said.
“HTC has to work very hard to satisfy its customers who are placing increasing orders for its products,” Chang said, adding that: “Its efforts to build itself up as a branded smartphone maker have paid off.”
Chang said the global penetration rate of smartphones is expected to rise to 20 percent this year from about 15 percent last year, adding that: “The penetration level is still low, which means HTC has much room for growth.”
At an investor conference last week, HTC said it was planning to expand production capacity at its plants in Taoyuan and Shanghai by the end of this year.
“Faced with rising orders, the company has no choice but to boost production capacity,” Chang said.
Monthly capacity at its Taoyuan complex currently stands at 2 million units, while its Shanghai base is expected to produce 1 million units a month by the end of the third quarter, with production capacity expected to rise to over 3 million units in the fourth quarter.
Although HTC expects shipments for the third quarter to rise to 6.5 million units from 5.4 million units in the second quarter, Chang said this estimate was too conservative.
She said HTC is currently resolving problems with panel shortages by using Sony’s super LCD as a replacement for active matrix organic LEDs, which have been short in supply.
“Component supply is no longer a pressing problem for HTC ... I expect shipments in the third quarter to hit between 7.3 million and 7.5 million units,” Chang said.
Chang said she recommends a buy on the stock with a 12 month target price of NT$700, while Goldman Sachs has set a target price of NT$800.
HTC closed up 0.17 percent at NT$603.00 on the Taiwan Stock Exchange yesterday.
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