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KGI Securities slashes new HTC One shipment forecast

2013/03/07 10:44:55

Taipei, March 7 (CNA) A local brokerage said Wednesday it has slashed its forecast by as much as 80 percent for shipments of Taiwan-based HTC Corp.'s new flagship smartphone in the first half of 2013 due to low yield rates of some key components.

KGI Securities lowered its estimate for the HTC One from 4 million units to between 800,000 and 1.2 million units, explaining that its channel checks indicate production bottlenecks related to the phone's voice coil motor (VCM) and compact camera module (CCM) on its UltraPixel camera.

As a result of the revision, KGI predicts that HTC will ship 10.5 million smartphones in the first half of this year, far below its previous forecast of 14 million to 15 million units, it wrote in a note to clients.

"We believe the production restraints that UltraPixel faces will severely limit HTC One shipments," KGI analyst Kuo Ming-chi said, citing the low production yields of VCM and CCM of 20 percent to 30 percent and under 20 percent, respectively.

There is a real possibility, Kuo said, that the golden opportunity HTC has to grab a sizeable share of the smartphone market this year before rivals Apple Inc. and Samsung Electronics Co. launch their new models, could sink without trace.

KGI downgraded its rating for HTC's stock to "underperform" from "outperform" with a target price of NT$150 (US$5.06). HTC shares closed flat at NT$255.5 Wednesday.

HTC, which is betting on its new HTC One smartphone to revive its fortunes, reported NT$11.4 billion Wednesday in sales for February, the lowest in the past three years.

The monthly sales represented a decline of 26.6 percent from January, the company said, noting that it will have to generate sales of more than NT$23.1 billion in March to reach its minimum target of NT$50 billion for the first quarter of the year.

As of 10:35 a.m. Thursday, HTC shares rose 1.96 percent to NT$260.5.

(By Jeffrey Wu)