Compal Communications expected to rebound on Nokia orders
Central News Agency
taiwannews.com.tw
2013-06-18 01:05 PM
Taipei, June 18 (CNA) Taiwan-based Compal Communications Inc., which produces Lumia phones for Nokia Oyj, is likely to post strong business growth in the second half of 2013 thanks to multiple smartphone projects, according to Goldman Sachs. The U.S. brokerage firm expected Compal Communications' second-half revenues to account for 74 percent of its full-year revenues on bigger orders from customers such as Nokia, Sony Corp. and Lenovo Group Ltd. "We believe such strong revenue expansion may bring substantial operating leverage and may surprise the market on the upside, after the possible net losses in the first half of 2013 due to lack of scale," Robert Yen, a Taipei-based analyst at Goldman Sachs, said in a report dated June 16. Compal Communications has expended considerable resources in building its relationship with Sony since 2007, and the two companies will likely partner on more than one project in 2013, Yen said. The company is also likely to pick up more contract manufacturing orders from Nokia after tapping into the Finnish cell phone maker's Windows Phone 8 (WP8) product portfolio, he said. Goldman Sachs kept its "buy" rating on the stock and set a target price of NT$57 ( US$1.9). Shares of Compal Communications had risen 1.84 percent to NT$35.95 as of 11:14 a.m. in Taipei Tuesday. According to data from market research firm IDC, 7 million phones with the Windows operating system were shipped globally in the first quarter of 2013, up 133 percent year-on-year. Nokia was largely responsible for driving these volumes higher, accounting for 79 percent of all Windows OS phones in the quarter, IDC noted. Nokia has shipped 20.3 million smartphones with Windows Phone software since it was introduced in 2011, and the devices' reach has grown worldwide to address multiple market segments, the researcher said. The Windows Phone operating system remains a small player in the global smartphone market, however, accounting for only 3.2 percent of the total 216.2 million smartphones that were shipped in the first quarter, IDC data showed. In comparison, Google Inc.'s Android grabbed a 75 percent market share and Apple Inc.'s iOS held a 17.3 percent share. (By Jeffrey Wu) |
