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HTC celebrates excellent sales results for May

TAIPEI, Taiwan -- Handset maker HTC yesterday celebrated the company's results over May by offering to treat customers who had recently purchased smartphones from the company.

The company in May achieved first place in both units sold and overall revenues in the Taiwan market generated by its popular One M8 flagship and its Desire series of mid-ranged smart phones.

In addition, the company announced that, effective today, customers who have purchased HTC handsets including the One M8, One mini 2, Desire 816, Desire 816 Dual, and Desire 610 may register their smart phones to receive a NT$35 coupon towards their next cup of coffee or ice-cream cone at 7-Eleven convenience stores nationwide. The complimentary offer will run through July 31.

Meanwhile, amid misgivings expressed by foreign and domestic financial institutions over the company's prospects in the second half of the year, HTC shares yesterday plummeted by NT$4.5 or 3.25 percent to close at NT$138.5.

Citing historical precedents, Kuala Lumpur-based CIMB Securities (聯昌證券) stated HTC earnings typically peak during the second quarter, and that the company in the second half of this year is facing forthcoming challenges including the arrival of Apple's iPhone 6 handset, the ever shortening product cycles of the smart phones sector, and the anticipated changes in the China market. CIMB yesterday slashed the target price of HTC shares to NT$97, while advising investors to reduce holdings.

According to CIMB, HTC's profitability may plummet in the next three coming years, with earnings-per-share performance declining to minus NT$2.23, minus NT$0.48 and minus NT$0.46. Most notably, the financial institution is expecting HTC's third quarter revenues to decline by 30 percent from the previous period.

Despite several upcoming new HTC products rumored to hit the shelves in the second half of this year, CIMB advised the company to continue in improving cost control and marketing efforts to maintain sales momentum, while cautioning against its reliance on China's budding market for 4G-capable handsets as revenues prospects may be drastically hampered in the event of subsidy policy changes.

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