HTC to see over 50% jump in Q2 revenue: BNP Paribas
By Kathryn Chiu, The China Post
March 19, 2014, 12:07 am TWN
TAIPEI, Taiwan -- BNP Paribas on Tuesday said it expected HTC Corp. (宏達電) to post a 51.9-percent jump in its second-quarter revenues, saying that the worst time for the Taiwanese smartphone vendor will soon be over.
BNP Paribas yesterday said in a research note that HTC's latest model M8, to be launched on March 25, will pull HTC out of the most difficult time in its history, adding that diversified new models are expected to boost HTC's second-quarter consolidated sales by 51.9 percent over the previous quarter.
BNP Paribas also upgraded HTC's target price by 32.4 percent to NT$94 while maintaining "sell" rating amid overcompetition and concerns that lower-cost models will squeeze the company's average sales price and gross margin.
BNP Paribas said HTC is taking advantage of the booming lower-cost smartphone market in China by putting several mid-range models, including the Desire 816, on the market.
Mainland Fans Snap Up HTC's Desire 816
In addition to a warm reception from China Unicom subscribers, the phone has proven popular in online sales launched by messaging service WeChat. In the first round of WeChat's online sale, 10,000 Desire 816 pre-orders were snatched up within a minute, according to the Central News Agency (CNA).
CNA cited market analysts to report that HTC is targeting the lower cost smartphone market in China in a bid to offset the impact from fiercer-than-ever competition in the high-end smartphone market.
The Desire 816 carries a price of only 1,899 Chinese yuan, or about NT$9,500 in Taiwan, while the pricing includes 299 yuan-worth of gifts to sweeten the deal.
HTC and China Unicom are scheduled to put the Desire 816 on store shelves on Wednesday. HTC will also cooperate with China Mobile and China Telecom shortly to sell more Desire 816s there, according to local media.
In an investor conference held in February, HTC put its consolidated sales for the first quarter at between NT$34 billion and NT$36 billion, down 16-21 percent from the previous quarter.
In the first two months of 2014, HTC's consolidated sales totaled only NT$16.9 billion. Despite the weak sales in the two-month period, the smartphone vendor has not revised its first-quarter sales guidance.