TAIPEI — Shares of Taiwan-based smart phone maker HTC Corp. extended their losses yesterday, falling below the NT$500 mark after a group of foreign brokerages cut their target prices on the stock due to the company’s gloomy forecast for the fourth quarter of this year, dealers said.
The expanded turnover shows that many institutional investors, in particular foreign ones, scrambled to lower their holdings after HTC cut its sales forecast for the October-December period to NT$104 billion from a previous estimated range of NT$125 billion to NT$135 billion, they said.
The smart phone maker said the lower sales forecast reflected fierce competition and weakening global demand.
HTC closed down 7 percent for a second day, the maximum daily decline, at NT$489.50, with 39.03 million shares changing hands, while the benchmark weighted index ended down 1.16 percent at 6,784.52 points.
The foreign brokerages, including Goldman Sachs, Citigroup Global Markets, UBS Securities, Macquarie Securities and Morgan Stanley, have lowered their target prices on HTC shares. Morgan Stanley even issued a target price of as low as NT$400.
“It seems that pessimism over HTC has been running deeper in the market to hammer the stock again after yesterday’s 7 percent fall,” MasterLink Securities analyst Tom Tang said. “The stock may face more downward pressure due to the negative sentiment,” Tang said.
“The stock may continue to trend lower to around NT$450 in the short term before staging a technical rebound,” he said.
Tang, who predicted that HTC will post NT$75 in earnings per share for 2011, said it is hard to forecast the smart phone maker’s earnings for 2012 as the company has been haunted by market uncertainty.
“Investors had better distance themselves from the stock at the moment until they have a clear indication of the company’s earnings outlook,” he said.