Taipei, Sept. 7 (CNA) Shares of Taiwan-based smartphone brand HTC Corp. were hammered by poor August sales to plunge below NT$40 (US$1.30) at the end of Friday's session, the lowest level since the company launched an initial public offering in 2002, dealers said.
The heavy downward pressure reflected weak sentiment toward the company as many investors seemed to have little faith that HTC will be able to surmount its current doldrums amid escalating competition in the global smartphone market, the dealers said.
HTC shares closed down 6.56 percent to end at NT$39.90, the lowest level after its IPO on March 26, 2002, underperforming the broader market, where the benchmark weighted index ended down 0.71 percent at 10,846.99 points. The stock came under pressure soon after the local equity market opened Friday and selling continued and increased to further depreciate the stock by the end of the session, the dealers said.
"The August sales show it is unlikely that HTC will make any immediate turnaround," Hua Nan Securities analyst Kevin Su said.
"While HTC has announced the launch of new models later this year, the chances are slim that that the company's sales will increase accordingly, as it faces stiff market competition," he said.
Last week, HTC said it will put its latest mid-range model -- the HTC U12 Life -- on sale in Taiwan in October, hoping that the new device will attract buying and help the company secure alternative sales.
In a statement released Thursday, HTC said it posted NT$1.39 billion on consolidated sales in August, a new low since August 2003, when its revenue stood at NT$1.33 billion. The August sales were down 53.72 percent from a year earlier and also down 0.78 percent from a month earlier.
In the first eight months of this year, HTC's consolidated sales totaled NT$18.35 billion, down 53.96 percent from a year earlier.
Friday's closing level was just a small fraction of the NT$1,300.00 that HTC shares hit in late April 2011, the highest level for the company and any other stock listed in the local equity market at that time, as the brand once grasped a large market share in the United States as well as other major markets. But since then, the stock has moved lower as the company's sales have been on the decline.
Dealers said that although HTC has intensified its efforts to penetrate the global virtual reality market by launching its first VR headset -- the HTC Vive -- in 2015, its VR operations have failed to give a significant boost to the company's sales.
Faced with worsening financial results, HTC announced a layoff of 1,500 employees in early July, about 25 percent of its global workforce. The layoffs are expected to be completed by the end of September, with the manufacturing sector in Taiwan affected the most.
In the second quarter, HTC incurred NT$2.09 billion in net losses, or a loss of NT$2.53 per share, compared with NT$25.70 in earnings per share for the first quarter. The first-quarter profit came after HTC sold its smartphone ODM assets to Google Inc. for US$1.1 billion.
In 2017, HTC incurred net losses of NT$16.91 billion and a loss per share of NT$20.58, the highest since its listing on the local main board in March 2002.
Source: Focus Taiwan News Channel