HTC shares jump above NT$80 on buy-out hopes

The China Post - - LOCAL -

Shares of Tai­wan- based HTC Corp. ( ) soared Mon­day morn­ing to NT$ 80 ( US$ 2.58) on ac­qui­si­tion hopes for the smart­phone ven­dor, which has been experiencing op­er­a­tion dif­fi­cul­ties, deal­ers said.

The buy- out hopes arose af­ter Asustek Com­puter Inc. (

) , one of Tai­wan’s lead­ing PC ven­dors, said June 12 that it did not rule out of the pos­si­bil­ity of ac­quir­ing HTC.

Mon­day’s buy­ing also re­flected the fact that for­eign in­sti­tu­tional in­vestors had been pur­chas­ing HTC shares in re­cent trad­ing ses­sions, tak­ing ad­van­tage of a slump in the stock as a re­sult of its poor earn­ings out­look, deal­ers said.

As of 11: 06 a. m., shares of HTC had climbed by the max­i­mum daily 10 per­cent to NT$ 83.60, with 19.66 mil­lion shares chang­ing hands. The weighted in­dex on the Tai­wan Stock Ex­change was down 0.10 per­cent at 9,292.49 points.

“The buy- out leads sim­ply prompted many bar­gain hun­ters to pick the stock this morn­ing af­ter the re­cent heavy sell­ing on fore­casts of mas­sive losses for the pe­riod April to June,” Ta Ching Se­cu­ri­ties an­a­lyst Andy Hsu said.

On Fri­day, Asustek Chair­man Jon­ney Shih ( ) told re­porters that his com­pany had held in­ter­nal “in­for­mal” dis­cus­sions about ac­quir­ing HTC.

Asustek has en­tered the turf of mo­bile de­vices, in par­tic­u­lar bud­get smartphones, in a bid to off­set the ef­fects of a weak global PC mar­ket.

HTC de­clined to com­ment on Shih’s re­marks, say­ing only that it would con­tinue to hold on to the spirit of “pur­su­ing ex­cel­lence and per­fec­tion” and re­lease amaz­ing prod­ucts to pro­mote its brand around the world.

“It’s too early to say whether such an ac­qui­si­tion will take place, so I pre­fer to say that HTC’s cur­rent gains are tech­ni­cal in na­ture,” Hsu said. “With con­cerns over HTC’s prof­itabil­ity still re­main­ing, the stock re­mains tech­ni­cally weak.”

HTC shares had suf­fered a heavy down­turn since June 5 when it fore­cast a loss per share of NT$ 9.7- NT$ 9.94 for the April- June pe­riod, re­vis­ing its ear­lier pro­jec­tion of NT$ 0.06NT$ 0.34 in earn­ings per share. Be­fore Mon­day’s re­bound, the stock had fallen about 18 per­cent from NT$ 92.80 at the close of trade on June 5.

Af­ter the re­vised fore­cast, sev­eral for­eign in­sti­tu­tional in­vestors cut their tar­get prices on HTC shares, and one Euro­pean bro­ker­age dropped its tar­get price from NT$ 100 to NT$ 52, the low­est among the for­eign bro­ker­ages that track HTC shares.

In the seven trad­ing ses­sions prior to Mon­day, for­eign in­sti­tu­tional in­vestors had sold a net 9.56 mil­lion HTC shares. Hsu said the data sim­ply showed that for­eign in­vestors were buy­ing the stock for trad­ing pur­poses only, but the for­eign pur­chases have mo­ti­vated many other in­vestors to buy into HTC shares.

“Af­ter the fore­cast of heavy sec­ond- quar­ter losses, HTC is un­likely to post a net profit for the en­tire 2015 so its share price may re­main in the dol­drums in the near term de­spite the lat­est tech­ni­cal re­bound,” Hsu said.


A man uses a smart­phone in Taipei, yes­ter­day. Shares of the Tai­wanese smart­phone man­u­fac­turer HTC Corp. ( ) soared to NT$80 (US$2.58) yes­ter­day morn­ing af­ter Asustek Com­puter Inc. ( ) an­nounced that it has not ruled out the pos­si­bil­ity of ac­quir­ing HTC.

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