Handset unit's deficit shaves profit at computer giant to HK$539 million
China's largest computer maker Legend Group has warned it may sacrifice short-term profit as it continues to invest in its loss-making mobile handset manufacturing business.
Announcing a 2.91 per cent growth in interim profit to HK$539.4 million yesterday, chairman Liu Chuanzhi said the lower-than-expected result was caused by the additional investment in the handset business.
'We could have grown 15 per cent to 20 per cent in our profits, but we chose to invest for our future,' Mr Liu said yesterday.
Legend's result was dragged down by a huge - but narrowing - loss in its mobile unit, which reported a HK$42.72 million loss in the six-month period ended September 30. Without the mobile-phone venture, profit from its core computer business would have been up 18.5 per cent to HK$644 million.
Chief financial officer Mary Ma Xuezheng said the mobile-phone unit, which sold 700,000 units in the period, reduced losses in the second quarter, but it would still be under pressure for the rest of the year. 'It is of strategic importance to us to stay in mobiles because it is the combined point between communication and computing,' Ms Ma said.
Handset sales rose 36 per cent to HK$908 million in the first half, but losses were trimmed down to HK$18.4 million in the second quarter, from HK$24.2 million in the first quarter.
