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Shares of HTC lower on lingering component shortage concerns

2013/04/01 14:46:40

Taipei, April 1 (CNA) Shares of Taiwan-based HTC Corp. moved lower Monday as market sentiment remained haunted by lingering fears of a component supply shortage that could impact the company's shipments, dealers said.

The stock underperformed the broader market as selling was triggered by a couple of foreign brokerages that voiced concerns over the smartphone supplier's sales due to a component supply shortage, the dealers said.

Shares of HTC fell 1.64 percent to NT$240.50 (US$8.04) with 6.03 million shares changing hands, while the benchmark weighted index was down 0.24 percent, at 7,899.24 points.

Market analysts said it is possible that HTC will miss the sales target of NT$50 billion-NT$60 billion it gave in February as shipments of its latest flagship model -- the new HTC One -- have been delayed for certain countries due to the component shortage.

"I expect HTC's consolidated sales for the January-March period to reach NT$48 billion at the most. A worse scenario is that its revenue will reach only NT$47 billion," Grand Cathay Securities analyst Mars Hsu said.

"Before the company reports its March sales next week, many investors preferred to remain cautious, so it was no surprise that HTC shares underperformed the broader market," Hsu said.

In the first two months of this year, HTC's consolidated sales totaled NT$26.9 billion, down about 27 percent from a year earlier. In the fourth quarter of last year, HTC posted NT$60 billion in consolidated sales, down from NT$70.2 billion recorded in the previous quarter.

Among the foreign brokerages that fear HTC cannot hit its first quarter sales target, Macquarie Securities said the impact of the component shortage is unlikely to be alleviated until the end of April.

The brokerage, which has maintained an "underperform" recommendation on HTC shares, has lowered its target price on the stock to NT$142 from NT$200.

Macquarie Securities said that as HTC is still faced with strong competition from Samsung Electronics Co. of South Korea and U.S.-based Apple Inc., it has also lowered its forecast of the new HTC One shipments for the second quarter to a range between 1 million and 1.5 million units from an earlier estimate of 1.5 million-2 million units.

JP Morgan Chase said HTC's first quarter sales could amount to just NT$45 billion and unless the component shortage can be resolved by late April, sales for the second quarter could continue to be affected.

(By Esme Jiang and Frances Huang)