Newspaper report stings Legend
Legend Holdings, China's leading computer-maker, plunged as much as 10 per cent yesterday on news that the company slashed orders of computer parts from its Taiwanese vendors.
The counter dipped to an intraday low of HK$3.375 yesterday before finishing the session at $3.425, an 8.66 per cent fall for the day.
Taiwan's China Times yesterday reported that the top mainland computer-maker had substantially cut back orders of computer components, such as motherboards, liquid crystal displays and other desktop computer components from the island's manufacturers this month because of a slowdown in personal computer sales.
The newspaper said Legend had trimmed 150,000 units of parts in orders for this month, representing about 4 per cent of the company's sales target.
However, a Legend spokesman denied claims of a slowdown in sales, saying 'Legend's sales and business operations remain on track'.
'We have an internal system to manage and assess our relationship with vendors, it is normally to adjust and shift orders between vendors,' Legend said. This year's 3.7 million unit sales target was unchanged.
JP Morgan said in a research report that Legend had switched some orders to other vendors and the speculation of inventory build-up was unfounded.
However, other analysts believed it would be difficult for Legend to achieve its sales target because of the expected slowdown in China's personal computer market.
The overnight cut of peer Gateway's rating by Standard & Poor's also hit sentiment.