Legend Holdings Recommendation: Buy Brokerage: Yamaichi LEGEND is the listed arm of China's largest personal computer maker, and manufactures and wholesales its own line of products. Buffeted by severe competition and declining memory-chip prices, Legend posted a loss of $195 million and its share price tumbled to a low of 31 cents last August. The share has risen recently on news of asset injections from its parent and fund-raising to boost working capital. The growth prospects are not yet reflected in the price. The firm's outlook suggests it should be trading on a much higher price-earnings ratio. Wing Hang Bank Recommendation: Buy Brokerage: Seapower Research WING Hang Bank has operations in corporate and retail banking, foreign exchange and other financial services. A strategy of focusing on small to medium-size customers will shield it from the serious customer defaults which have plagued other banks. Meanwhile, a well diversified loan portfolio will help it capture opportunities from the rebounding economy. Customer advances should rise 14 per cent this year, while its insurance joint venture will add new income from the fourth quarter. Hong Kong and China Gas Recommendation: Buy Brokerage: Nikko Research HONG KONG and China Gas produces, distributes and markets gas and appliances. Gas continues to meet or beat the market's high expectations as 1996 profit rose 19 per cent to $1.94 billion with the operating margin up almost 3 per cent to 46 per cent. A general emphasis on cost containment and lower unit fuel costs should offset the negative impact of higher depreciation charges. Higher net interest income should boost net profit by 17 per cent this year, while the company should net $3.5 billion from conversion of warrants. Guangzhou Shipyard Recommendation: Sell Brokerage: ING Barings GUANGZHOU Shipyard makes and sells ships, containers and lifeboats, and leases ships and boats. The company announced a disappointing profit of 33 million yuan for 1996 with a 67 per cent decline in earnings per share. Shipbuilding profit margins collapsed from 12 per cent to 5 per cent due to competitive prices and the effects of a cut in the tax rebate. Shipbuilding profits could be further eroded due to unfavourable economic policies.