HTC says 'no' to takeover amid share plunge: report

2013/10/07 15:54:47

HTC Corp. Chairwoman Cher Wang. (CNA file photo)

Taipei, Oct. 7 (CNA) HTC Corp. has rebutted a rumored takeover by larger rivals despite the Taiwanese smartphone maker's plunging share price, according to a report by U.S. TV network CNBC.

"We don't need to be taken over," HTC Chairwoman Cher Wang said in an interview with CNBC's Managing Asia published Oct. 4.

"Stock price is really the past. Innovation is the future. I actually never look into the price, it doesn't influence me," she said. "The (ability) of the company to be able to stick with (its) vision is the most important."

The report came on the same day that HTC reported its first quarterly loss as a public company. HTC said its consolidated revenues for the third quarter amounted to NT$47 billion (US$1.6 billion), falling short of its projected target of NT$50 billion and representing a 29.3 percent quarter-on-quarter decrease.

As a result, the company incurred a net loss of NT$2.97 billion for the July-September period, or NT$3.58 per share, it said in a statement.

The stock had lost 55 percent of its value with a closing price of NT$135 Oct. 4.

The dismal share performance has reportedly made HTC a target for other deep-pocketed handset makers, especially Chinese companies looking to overseas expansion, such as Lenovo Group Ltd., Huawei Technologies Co. and ZTE Corp.

Peter Chou, HTC's chief executive officer, has come under fire amid the company's falling sales, but Wang said she does not expect any management reshuffle.

"Peter is a great guy. He has a lot of innovative ideas and he's very charismatic," she said in the CNBC interview.

The chairwoman declined to comment on any planned new HTC products, adding that the company is going to have "a very interesting road map," the report said.

While Wang remains confident about HTC's innovation and leadership, analysts believe the company is trapped in a vicious cycle in which its poor execution and distribution have led to insufficient scale and less support from component suppliers.

"We think it should consider a joint venture opportunity and/or strategic partnership to expand its market/products," Laura Chen, an analyst at BNP Paribas Securities Taiwan Ltd., wrote in an Oct. 4 research note.

"We expect that it could suffer from cash flow difficulties if there is no fundamental improvement," said Chen, who maintained a "reduce" rating and a NT$71 price target for the stock.

HTC shares slumped 7 percent, the maximum daily decrease, to close at NT$126 Monday on the Taiwan Stock Exchange.

(By Jeffrey Wu)
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