Shares of Quanta up on shipment, iWatch hopes
Central News Agency
2014-06-20 11:44 AM
Taipei, June 20 (CNA) Shares of Taiwan-based Quanta Computer Inc. moved higher Friday morning to outperform the broader market as the world's largest laptop ODM services provider gave an optimistic shipment forecast for the third quarter, dealers said. Many investors also hold high hopes that Quanta will benefit from its efforts to diversify its product portfolio by entering the wearable devices field, they said. There has been speculation that Quanta has secured orders from Apple Inc. to produce a rumored iWatch, which could strengthen the contract manufacturer's bottom line, they added. As of 11:08 a.m., shares of Quanta had added 1.07 percent to NT$84.90 (US$2.83) with 3.56 million shares changing hands. The weighted index on the Taiwan Stock Exchange was down 0.14 percent at 9,303.46 points. In an annual general meeting held Thursday, Quanta Vice Chairman C.C. Leung told shareholders that the company's notebook computer shipments for the third quarter are expected to rise more than 10 percent from the second quarter as the global PC business has been recovering. "It is reasonable for Quanta to give such an upbeat assessment as the third quarter is a traditional peak season for the PC industry," Hua Nan Securities analyst Kevin Su said. "More important, it seems that the world's PC market is improving and going stronger than ever." Su said market sentiment toward PC shipments have improved, particularly after chip giant Intel Corp. raised its sales guidance for the second quarter last week on stronger-than-expected demand for personal computers used by businesses. In the first five months of the year, Quanta posted NT$358.54 billion in consolidated sales, up 12.11 percent from a year earlier. Su said the over 10 percent year-on-year increase has earned Quanta a label as a good performer. "The third quarter will no doubt continue to ride the wave of an uptrend on peak season effects. I am not surprised that investors picked up Quanta shares soon after the local bourse opened," Su said. Leung, meanwhile, said that wearable devices are expected to start making a meaningful contribution to the company's sales in the second quarter of this year. Su said that as a result, current buying reflects expectations that Quanta has won orders to make the rumored iWatch. Speculation was sparked by foreign brokerages' research reports, which said Quanta will kick off production of an iWatch in July for an October launch. Some foreign institutional investors have even issued a target price of NT$99 on Quanta shares on expectations of Apple orders. Su said that with Quanta's core PC business recovering and its efforts in product diversification, the company could post about NT$5.5 in earnings per share for 2014, up from NT$4.84 recorded a year earlier. "Based on the 2014 earnings prospects, Quanta appears cheap. I expect the stock will continue to move higher until coming closer the nearest technical resistance of NT$88.6," Su said. (By Han ting-ting and Frances Huang)
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