Taipei, Oct. 8 (CNA)－Shares of Taiwan-based smartphone brand HTC Corp. dropped sharply Monday morning after the company reported a continued decline in sales for September, dealers said.
As of 12:13 p.m., shares of HTC had plunged 6.77 percent to NT$35.80 (US$1.16), off an early low of NT$34.70, with 14.26 million shares changing hands. On the wider Taiwan Stock Exchange, the weighted index was down 0.81 percent at 10,431.43 points.
The stock came under heavy pressure soon after the local equity market opened and although it later recovered somewhat, it continued to trade below its intraday low of NT$36.40 in recent sessions. “Seizing on the September sales data, investors rushed to dump the stock,” Ta Ching Securities analyst Jerry Chen said. “It seems that the market has lost faith in the outlook for HTC’s operations in light of the company’s declining monthly sales.”
In a statement last Friday, HTC reported about NT$1.26 billion in consolidated sales for September, down 80.71 percent from a year earlier and 9.58 percent lower than in August. HTC’s September sales remained under NT$2 billion for the third consecutive month and were the lowest since May 2003, when the company reported sales of NT$1.13 billion.
In the first nine months of this year, HTC’s consolidated sales totaled NT$19.61 billion, a year-on-year decline of 57.72 percent. “The figures reflect the fact that HTC is facing escalating competition in the global smartphone market,” Chen said.
“The company’s smartphone operations are unlikely to make a turnaround soon.” He said that although HTC has stepped up its efforts in the global virtual reality market, the sales from its VR division are just a small fraction of its total revenue. HTC unveiled its first VR headset — the HTC Vive – in 2015 and has since launched later models in a bid to penetrate the global market.
“The VR market, however, is relatively small compared with the smartphone market,” Chen said. He said that while HTC shares recovered slightly Monday from their intraday low of NT$34.70, “there is little technical support out there amid bearish sentiment toward the company, which indicates that the downtrend of the stock is unlikely to stop anytime soon.”
HTC shares have been in decline since April 2011, when they hit a record high of NT$1,300.00 as the brand at that time had a large market share in the United States and other major markets.
Meanwhile, Texas-based Motiva Patents last week filed a lawsuit against HTC in a Texas District Court for alleged infringement of five patents.
HTC has declined to comment on the lawsuit, on grounds that it is an ongoing legal case.