Taipei--Shares in Taiwan-based smartphone vendor HTC Corp. (???) were hit hard on the Taiwan Stock Exchange on Tuesday after the company reported disappointing sales data for January a day earlier, dealers said.
The stock was affected by a generally gloomy mood with one foreign brokerage maintaining an "underweight" rating on HTC and another cutting its target price after the January sales report, they said.
Meanwhile, HTC announced on Tuesday that its U series will go global with pre-order sales launched in Hong Kong on the same day and the latest flagship models scheduled to hit the European market at the end of February.
Shares in HTC fell 2.16 percent to close at NT$76.90 (US$2.48) with 12.01 million shares changing hands, lagging the local main board, where the weighted index ended the day up 0.17 percent at 9,554.56 points.
The stock faced heavy downward pressure soon after the local equity market opened as investors responded to the latest sales report and that weakness continued until the end of the session.
In a statement, HTC said consolidated sales for January were NT$4.66 billion, a 10-month low. In addition, January sales were down 27 percent from a month earlier and 28 percent year-on-year.
A U.S.-based brokerage said that HTC's poor sales report reflected its weak smartphone business which has encountered escalating competition in the global market in both high-end and mid-to-low range model segments.
In addition, the brokerage said, the HTC Vive, the first virtual reality headset launched by the Taiwanese firm failed to help the smartphone brand increase sales in the month. The Vive was launched in 2015 and went on sale in 2016 in a bid to diversify HTC's product line from its core smartphone market, in the hope of generating a new revenue stream to turn around its money-losing business.
The brokerage said that under current unfavorable conditions, HTC's sales are expected to remain tepid in February and March, adding that the company could continue to report a loss in 2017. As a result, the brokerage said it has retained an "underweight" rating on HTC shares and a NT$48 target price on the stock.
Another U.S. brokerage said it has lowered its target price on HTC shares from NT$68 to NT$58 and left its "underweight" recommendation unchanged, adding that 2017 will be another challenging year for the company.
In a statement released by HTC on Tuesday, the smartphone brand said that following the introduction of its two new models -- the bigger HTC U Ultra and smaller HTC U Play -- in Taiwan in January, the global product launch started in Hong Kong on Tuesday and will be rolled out in Europe later in the month.
The U series has replaced the HTC One series as the latest flagship model for the Taiwanese smartphone vendor.
The most attractive feature for the two new phones is that they have an artificial intelligence (AI) function, while both have an aluminum look for a refined finish. In addition, the metal frame of the new U series comes with a curved glass back.
However, the two U.S. brokerages said the U series is expected to face stiff competition from Samsung Electronics Co's Galaxy 8, Huawei's P10 and OPPO's R11 from the second quarter of the year.
Source: Focus Taiwan News Channel