Source:
https://scmp.com/article/298364/legend-posts-63pc-profit-first-half

Legend posts 63pc profit in first half

Legend Holdings, the mainland's No 1 personal computer seller, has posted a year-on-year 63.45 per cent jump in first-half profit to $173.54 million, bolstered by sales of its brand-name products.

The red chip's turnover reached $7.33 billion for the six months to September 30, up 41.31 per cent year-on-year.

Diluted earnings per share amounted to 9.7 cents, up from six cents.

The board recommended an interim dividend of 2.5 cents, compared with two cents in the year-ago period.

Analysts had forecast full-year net profit of $344 million according to October's Estimate Directory.

Vice-chairman Li Qin said the Legend brand of PCs reported 64 per cent sales growth in the first half.

Its market share in the mainland was expected to exceed 20 per cent in the quarter to September 30, making the group the best-selling brand name in the Asia-Pacific region (excluding Japan) for the first time.

The figure was 17.3 per cent in the previous quarter.

Sales of Legend PCs accounted for 49 per cent of group turnover in the first half, up from 45 per cent for the year to March 31.

Mr Li expected the group's overall gross profit margin would remain stable in the second half.

Executive director Mary Ma Xuezheng said overall gross profit margin for the interim period was 12.1 per cent, compared with 11.8 per cent in the first quarter and 12.8 per cent in the year-ago period.

Net margin improved to 2.4 per cent from 2.1 per cent in the year-ago period.

Ms Ma said the motherboard business returned to profitability in the second quarter and was expected to turnaround in the full year.

Motherboards lost more than $10 million in the first quarter.

Company officials said the Taiwan earthquake had minimal impact on the group's component costs and sale prices.

Executive director Yang Yuanqing said component costs had been stable because the group produced some of the parts and there was limited room for price increases under the contracts with their suppliers.

This partly contributed to the group's expansion of market share in the second quarter, he said.

Mr Yang expected Taiwanese component prices would remain stable to the end of next month after a jump following the earthquake.

Chairman Liu Chuanzhi said the Internet would remain the focus of the computer market and the emphasis of the group's future development.

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