TAIPEI - Following a prolonged slump, with its share prices declining 88 per cent from its 2011 peak, HTC now represents an attractive acquisition to rivals, according to investment research firm Sanford C. Berstein & Co.
The company named mainland China-based handset makers including ZTE Corp., Lenovo Group and Huawei Technologies Co. as candidates looking to acquire the ailing Taiwanese company.
The research firm stated that large-scale Chinese handset makers are well equipped to acquire HTC, given how low its shares have fallen, and stand to benefit from taking over the company's considerable brand name value, as well as its research and design capabilities. HTC possesses numerous attributes that large-scale Chinese companies lack, representing an appealing acquisition target at stellar value proposition, according to Sanford C. Berstein & Co. analyst Pierre Ferragu.
HTC had earlier announced a gloomy outlook for the second half of this year, propelling widespread declines throughout August's trading. On August 2 HTC shares plummeted to NT$143 (S$6), marking an eight-year low, while registering a scant 0.44 price-to-sales ratio.
Ji Asia, an equity research firm, indicated a similar outlook for the company, stating that they expect HTC to tread water on cash reserves, adding that Chairwoman Cher Wang, along with the tremendous resources afforded to Wang-operated business conglomerates, are likely to combat acquisition bids.
New York-based equity research firm Wedge Partners Corp. stated that it is critical for HTC to produce a speedy recovery in sales, or face being acquired by deep-pocketed rivals.
In response, HTC stated that it is confident in producing a turnaround, citing confidence in its management team led by Peter Chou, and the popularity of its flagship handset model, while hoping for improvements in future performance.
Currently HTC's market capitalisation has fallen to about NT$127.3 billion.
Shares of HTC closed at NT$149.5, down NT$3.5, or 2.29 per cent, at the end of yesterday's session.