High Tech Computer Gets Hot
Though its name suggests otherwise, High Tech Computer Corp. is becoming a force in a growing niche of the cellphone industry, a role that investors are just starting to recognize.
Shares in the Taiwan company are up 31% this year, while Taipei's benchmark stock index is just about where it started the year. Analysts recently raised profit and share-price targets for HTC, based on evidence that first-quarter revenue will be greater than expected and that its earnings growth has become more sustainable owing to its diversification.
HTC is a leading maker of personal digital assistants, wireless PDAs and smartphones. It is a contract builder for some devices, such as the Treo 650 of U.S.-based palmOne Inc. But it is the main designer and builder of several similar gadgets based on Microsoft Corp. software, and builds most of them to the specifications of cellular-service providers. Then, it stamps their brand on the gadget and turns it over to them to sell.
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Smartphones and related gizmos are expected to account for 5% to 8% of the overall wireless-device market this year. Several European cellular operators are expected to unveil smartphones from HTC at CeBIT, an electronics-industry trade show in Germany that opened yesterday. At another conference last month, Deutsche Telekom AG's T-Mobile demonstrated a third-generation, or 3G, phone, while Hewlett-Packard showed a PDA phone -- designed and built by HTC.
Indeed, while HTC is smaller and not as well known as some other Taiwan contract manufacturers, its design skills allow it to stand out and put the company more squarely into competition with cellphone specialists such as Nokia Corp., Motorola Inc. and Samsung Electronics Co.
"It's not appropriate to see the other Taiwan contract manufacturers as competition for HTC," says Johnny Chan, an analyst for J.P. Morgan in Hong Kong. "Their competitive landscape is a global one."
HTC started out in 1997 as a contract manufacturer to companies that wanted to build personal digital assistants based on Microsoft's then-new Windows CE software. It later broke from the pack of contract builders by developing its own design skills. Soon, companies such as Compaq Computer were relying on HTC to develop PDAs from the circuit board up.
When signs emerged four years ago that smartphones were likely to render the organizer functions of a PDA obsolete, HTC built the first smartphone based on Microsoft's software and sold it to Orange SA, the cellphone unit of France Télécom SA, which offered it to the public in October 2002. But the product, riddled with design and software problems, sold poorly.
HTC continued to work with Microsoft designing phones that had PDA features and PDAs that had wireless features, such as access to Wi-Fi networks. Last year smartphones and wireless PDAs accounted for more than half of HTC's NT$36.4 billion (US$1.19 billion) in revenue.
While its technical skills are increasing, the company's willingness to build products without trying to sell them under its own name is attractive to cellular operators, who want their own brand in front of customers. "Pretty much all of the large U.S. and European operators are customers of HTC," says Mr. Chan, the J.P. Morgan analyst. "That means the business is getting less volatile."
Its work for palmOne represents a significant diversification that also reduces bottom-line volatility. HTC could build more than 500,000 Treo units this year, accounting for 15% of its revenue, according to an estimate by Tony Tseng, an analyst at Merrill Lynch in Taipei. But because palmOne designs the Treo devices, HTC's margin on manufacturing them is less than with the products it develops.
With average selling prices for smartphones and PDAs with wireless capabilities falling to a level that will appeal to mass-market shoppers, not just technology enthusiasts and corporate buyers, Mr. Tseng wrote that smart devices are "moving into a second phase of the product cycle" driven by higher sales volumes and lower gross margins.
HTC's strong stock performance so far this year is largely attributable to the 90% jump in sales it reported in January, a pace faster than its full-year 2004 sales growth of 66%, and the products that its customers have unveiled. The company's shares closed yesterday on the Taiwan Stock Exchange at NT$201, down 1.5%, or NT$3 on the day but up from NT$153 at the end of 2004.
At that level, the company is trading at just below 10 times its estimated 2005 earnings, a price/earnings ratio below other contract manufacturers for cellphones and computers, such as BenQ and Compal Communications, which both trade at P/E ratios above 14.
宏达国际一跃成为智能手机新贵
尽管公司的英文名称中包含“电脑”一词，但宏达国际电子股份有限公司(High Tech Computer Corp., 简称：宏达国际)却在智能手机领域异军突起，令投资者开始刮目相看。
该公司股价今年以来上涨了31%，而同期台湾证交所加权指数则基本持平。分析师最近上调了对宏达国际的利润和股价目标预期，因有证据显示，该公司第一季度收入将超过预期，而且由于多元化的经营战略，公司的收益增长更具有持续性。
宏达国际是领先的个人数字助理(PDA)，无线PDA和智能电话制造商。该公司依据合约生产一些设备（如美国PalmOne Inc.的Treo 650），并是基于微软(Microsoft Corp)软件的几种类似设备的主要设计和生产商，根据手机服务提供商的规格要求生产其中大部分设备，然后贴上自己的品牌，交给运营商销售。
预计智能电话及相关产品将占今年无线设备市场的5%-8%。在周四开幕的2005年汉诺威信息及通讯技术展(CeBIT)上，可能会有几家欧洲手机运营商展示宏达国际生产的新智能电话。在上个月的一次会议上，德国电信(Deutsche Telekom)旗下的T-Mobile演示了一款3G手机，惠普(Hewlett-Packard)则展示了一款PDA手机，二者都是由宏达国际设计和制造的。
的确，尽管宏达国际规模较小，在名气上也不如其他台湾合约制造商，但其设计能力使之能够脱颖而出，在同手机巨头诺基亚(Nokia)、摩托罗拉(Motorola)和三星电子(Samsung Electronics)竞争的过程中也毫不逊色。
JP摩根(J.P. Morgan)驻香港分析师陈力健(Johnny Chan)说，仅将其他台湾合约制造商看作宏达国际的竞争对手是不够的。目前它们面临的是全球性的竞争局面。
宏达国际1997年成立，当初是一家为其他公司生产基于微软Windows CE软件的个人数字助理的合约制造商。后来公司开始了进行自主研发，很快，康柏电脑(Compaq Computer)等公司就依靠宏达国际帮助开发PDA。
4年前，有迹象显示智能电话将使PDA的组织功能逐渐过时，宏达国际再次与微软走到一起。公司基于微软软件制造了首部智能手机，并销售给了法国电信(France Telecom)的手机子公司Orange，该公司于2002年10月向公众推出。但由于设计及软件方面的问题，这款手机销售情况不如人意。
宏达国际吸取了教训，并继续同微软合作，设计具有PDA功能的手机和具有接入Wi-Fi网络等无线功能的PDA。去年，智能电话和无线PDA占宏达国际新台币364亿元（合11.9亿美元）收入的一半以上。
在技术能力不断增强的同时，公司满足于生产产品、但不以自己品牌销售的做法对手机运营商颇具吸引力，这些运营商希望能以自己的品牌向客户进行销售。JP摩根的陈力健说，美国和欧洲的大部分大型运营商都是宏达国际的客户。这意味著公司业务波动性较小。
宏达国际与PalmOne的合作体现了业务多样性，同时也降低了利润的波动。美林(Merrill Lynch)驻台北分析师曾省吾(Tony Tseng)预计，宏达国际今年可能生产50多万部Treo智能手机，约占其收入的15%。但由于Treo是PalmOne设计的，宏达国际制造这些手机的利润率小于生产自己研发的产品。
曾省吾认为，随著智能手机和具有无线功能的PDA的平均售价正在达到足以吸引大众用户的水平，智能设备正在进入产品周期的第二阶段，其特点是销售量增长和利润率下降。
宏达国际股票今年以来的强劲表现主要归功于1月份公布销售额增长了90%，以及其客户推出的产品。1月份的增幅高于2004年全年66%的销售额增幅。周四该公司股价收于新台币201元，下跌3元，但高于2004年底时的新台币153元。
按周四的股价计算，该公司基于2005年预期收益的本益比略低于10倍，低于明基电通(Benq Corp.)和华宝通讯(Compal Communications Inc)等其他手机及电脑合约制造商。这两家公司的本益比都在14倍以上。
