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HTC shares stabilize after latest heavy losses
Central News Agency
2014-08-07 03:30 PM
Taipei, Aug. 7 (CNA) Shares of Taiwan-based smartphone vendor HTC Corp. showed signs of stabilizing Thursday, staging a technical rebound from the latest heavy losses caused by disappointing sales data for July, dealers said. However, the gains were capped amid lingering fears that the smartphone vendor will fail to achieve its third-quarter sales guidance, as the company is faced with rising competition not only in the high-end model segment but also in the lower-cost tier, the dealers said. Shares of HTC rose 2.47 percent on the Taiwan Stock Exchange to close at NT$124.50 (US$4.15) off an early low of NT$118.00, with 12.35 million shares changing hands. The weighted index ended down 0.13 percent at 9,131.44 points. The stock opened lower, extending losses from a 5.81 percent drop the previous day, but as it hit the day's low, some bargain hunting emerged to vault the share price back into positive territory and the strength continued into the end of the session, the dealers said. A day earlier, foreign institutional investors served as net sellers of 5.82 million HTC shares, while local proprietary dealers also sold a net of 999,000 HTC shares, pushing the stock closer to a 10-year low. Since HTC reported its lower-than-expected consolidated sales at the beginning of the week, shares of HTC fell about 10 percent in the following two trading sessions. In July, the smartphone manufacturer posted NT$10.6 billion in consolidated sales for July, down 51.6 percent from a month earlier and also down 32.58 percent from a year earlier. Market analysts said that judging from the July sales data, many investors have feared that HTC will not be able to reach the lower end of its third-quarter sales forecast of NT$42 billion-NT$47 billion, which will represent a drop of 27.8 percent-35 percent from the second quarter. "Such fears remain in place. So, I think today's gains were simply technical in nature," Concord Securities analyst Kerry Huang said. Analysts said the third quarter will not be the worst for HTC, adding that its sales will fall even further in the fourth quarter due to the launch of Apple Inc.'s launch of the next generation of the iPhone, while Samsung Electronics Co. will unveil a new Galaxy Note model at the end of the current quarter, which is expected to attract global consumers. In addition, HTC will continue to face stiff competition in the China market, where Chinese vendors will keep unveiling budget smartphone models carrying a price tag of 2,000 Chinese yuan (US$323) or less. (By Esme Jiang and Frances Huang)
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