HTC Follows BlackBerry to Smartphone Dead-End: Chart of the Day

October 3, 2013 Leave a comment

HTC Follows BlackBerry to Smartphone Dead-End: Chart of the Day

HTC Corp. (2498), the smartphone maker that’s lost 90 percent of its market value since 2011, is still too expensive for potential buyers following acquisition deals for BlackBerry Ltd. and Nokia Oyj (NOK1V), said Yuanta Securities Co. The CHART OF THE DAY shows Taoyuan City, Taiwan-based HTC trades at 1.4 times net assets, almost triple the 0.5 level of BlackBerry, the smartphone maker that agreed Sept. 23 to a $4.7 billion buyout. The lower panel shows the consensus ratings of analysts who follow HTC, BlackBerry and Nokia, which agreed last month to sell its handset business. The Taiwanese company is ranked 1.6 out of a possible 5, the lowest of more than 500 listed technology companies, data compiled by Bloomberg show.HTC is valued at $3.8 billion, down from $37 billion at the peak, after its shares tumbled to an eight-year low on Sept. 9. The company, the first maker of phones using Google Inc. software, forecast in July an eighth straight drop in quarterly sales as it struggles to compete with Apple Inc. (AAPL) and Samsung Electronics Co.

While HTC looks like it’s “going down the route” of BlackBerry and Nokia, the price-to-book ratio is “still too expensive” for a merger or acquisition, Dennis Chan, an analyst at Yuanta Securities in Taipei, said last week. “I don’t see a comeback.” Chan is among 24 analysts tracked by Bloomberg who have a sell rating on HTC, while five advise a hold and one recommends buying the shares.

HTC’s share of the global smartphone market fell to 2.8 percent in the second quarter from 5.8 percent a year earlier, Bloomberg data show. The company, which said in February 2012 it “dropped the ball” on products, enlisted actor Robert Downey Jr. in August to promote the brand. HTC isn’t looking for a buyer and has new initiatives to spur the brand’s “full resurgence,” the company said in an e-mailed statement.

BlackBerry’s buyout plan calls for a delisting of the Waterloo, Ontario-based company’s shares, down more than 90 percent from their 2008 peak. Nokia, the Espoo, Finland-based company that was once the world’s largest mobile-phone maker, agreed to sell its handset business to Microsoft Corp. in a $7.2 billion deal.

To contact the reporters on this story: Richard Frost in Hong Kong at rfrost4@bloomberg.net; Weiyi Lim in Singapore at wlim26@bloomberg.net

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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