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. Mr Liu said the company had doubled its research and development budget to 2 per cent of its sales in the first half, and expected to eventually raise its R&D budget to 3 per cent of sales. Overall, Legend experienced a 6.1 per cent quarter-on-quarter profit decline to HK$261.16 million in the second quarter, from HK$278.25 million in the first quarter. This is despite a sales growth of almost 17 per cent in the second quarter to HK$6.24 billion. Legend shares fell 5.33 per cent yesterday to HK$3.55 after it released its interim report before the afternoon session opened. Analysts said the share performance reflected a weaker than expected result, but the business going forward may be better than than the market expected. UBS analyst Joe Zhang said: 'Two of the three disaster areas that Legend lost money - mobile and IT services - are not going to get worse, and Legend had a surprising surge in consumer computer sales.' Consumer computers, which accounted for 35 per cent of turnover, jumped 13.5 per cent, while corporate computers rose just 5.3 per cent to HK$5.85 billion because of competition from foreign brands such as Dell and Toshiba. In the June-to-September period, Legend trailed foreign brands such as Hewlett Packard, which grew 85 per cent in sales, according to research firm International Data Corp. It said Legend's market share in China dipped to 27.7 per cent from 28.5 per cent in the second quarter. President Yang Yuanqing said the competitive environment helped Legend focus on its leading market position in serving the government and small to medium enterprise market.