HTC shares surge on speculation of China Mobile’s acquisition plans

October 25, 2013 Leave a comment

HTC shares surge on speculation of China Mobile’s acquisition plans

CNA
October 25, 2013, 12:27 am TWN

TAIPEI–Shares of Taiwan-based smartphone vendor HTC Corp. (宏達電) staged a strong rebound in heavy trading Thursday as bargain hunters rushed to buy into the stock, taking advantage of its relatively low valuation, dealers said. HTC shares rose 6.99% percent, nearly the maximum daily increase, to close at NT$145.50 (US$4.95) with 29.95 million shares changing hands, while the weighted index on the Taiwan Stock Exchange ended up 0.23 percent at 8,413.72 points.In the early session, buying in the stock was sparked by media reports that China Mobile, the largest telecom operator in China, was planning to take a stake in HTC and inject funds into the Taiwanese company, the dealers said.

Later in the session, however, HTC issued a statement denying the report, but buying interest remained strong and maintained its momentum until the end of the session.

Right before the end of the session, investors placed buying orders on about 13 million HTC shares.

Market analysts said that after recent consolidation, HTC shares appeared attractive to many bargain hunters, and the speculation on a stake acquisition by China Mobile further prompted investors to buy.

Due to the latest buying, the stock overcame stiff technical resistance ahead of the 60-day moving average of around NT$141.50, which could pave the way for a further uptrend in the near future, analysts said.

Management Duty Shift A Right Direction: Investors

Before the latest rebound, HTC shares had fallen more than 55 percent so far this year. The stock is down to about 10 percent of its historical high of NT$1,300 seen in April 2011.

In addition to the buyout speculation, local media said that HTC will launch a new model tailored for China Mobile subscribers in November and that the Chinese telecom operator will offer subsidies for the new device. This, however, was also denied by the smartphone vendor.

Analysts said many investors expect HTC to reach a turning point now that Peter Chou (周永明), the company’s chief executive officer, has transferred some of his management duties, including marketing and supplier relations, to HTC Chairwoman Cher Wang (王雪紅), while he will focus on product innovation.

They said that as Chou specializes in research and development, the market has high hopes that the change will help HTC move in the right direction and that its operations will improve accordingly.

Earlier this month, HTC reported a net loss of NT$2.97 billion, or NT$3.58 per share, for the third quarter, the company’s first quarterly loss since listing on the main board in March 2002.

The smartphone supplier has scheduled an investor conference for Nov. 5 to release more details about the third-quarter results and give its fourth-quarter guidance.

 

Filed under TMT Trends

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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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