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Technology Stocks : Dell Technologies Inc.

DELL 133.18

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To: Mohan Marette who wrote (97505)	2/12/1999 6:00:00 AM
From: Mark Peterson CPA	Read Replies (1) of 176387

Here's the skinny on Dell's principal competitor in China. Legend net profit soars 64pc CAPTION: Legend chairman Liu Chuanzhi says Legend's PC distribution and systems integration businesses were the major sales growth drivers in the first three quarters of the financial year. STORY: DESPITE fierce competition in China's computer market Legend Holdings announced yesterday a spectacular 64 per cent increase in net profit for the three quarters to 31 December 1998 to $199 million. The mainland's biggest computer manufacturer saw its operating profit surge to $242 million from $201 million recorded a year ago on a 46 per cent rise in turnover to $8.67 billion. Legend chairman Liu Chuanzhi claimed the company's personal computers (PCs), distribution and systems integration businesses were the major forces behind the substantial increases in sales. Figures provided by the group show that total PC shipments reached 630,000 units in the first three quarters of the financial year. These figures represented a 71 per cent jump from the same period last year and a 16.5 per cent share of the total PC market in China. A record 259,000 Legend PC units were sold in the third quarter alone. Mr Liu said he was confident Legend would achieve its sales target of more than 780,000 PCs for the financial year to 31 March 1999 on the back of increased government spending on computers in the second half. Based on a 28 per cent growth in China's PC market in 1998, Mr Liu expected the growth rate in 1999 not to be lower than the previous year. Gross margins for the nine months to December stood at 14.3 per cent, compared with 14.2 per cent for the six months to September. Seapower Securities analyst Samuel Chua said Legend's financial position was healthy but that margins on its PC distribution and system integration operation were being squeezed by fierce competition. Group executive director Mary Ma said Legend was now in talks with the Bank of China in Hong Kong for a possible new trading credit facility of more than $100 million. The company earlier received a $1 billion yuan credit line from the Bank of China in Beijing, of which 30 to 40 per cent has been used. At end-1998, its long-term liabilities had jumped to $214 million from $29 million at end-September. Mark A. Peterson

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