China's largest PC maker Legend Group posted a 21.1 per cent increase in net profits to HK$1.04 billion yuan (US$133.5 million) in its 2002 financial year ending in March 31, driven by a turnaround from a chilly winter for the home IT market. The Hong Kong-listed company said Wednesday that its revenue in 2002 jumped 5 per cent year-on-year to HK$20.23 billion (US$2.59 billion).
Its gross profit margin also increased to 14.8 per cent, compared with 13.7 per cent over the same period last year.
Yang Yuanqing, president of the 19-year-old company attributed its growth in business to a timely restructuring of its business strategy from a product-oriented model to service-and-technology-oriented model.
"Legend's businesses achieved a healthy growth by implementing a profitability-oriented market strategy last year and we did not get involved in price wars," said Yang.
Despite an 18 per cent sales increase, China's PC in 2002 only increased 2 per cent in revenues due to repeated price wars and tariff cuts, which drags down revenue.
Legend announced late last month it changed its English brand name from Legend to Lenovo, marking the first real step for an overseas expansion.
The company said it is to work out a detailed long-term strategy for overseas expansion by the middle of this year or late this year.
Mary Ma, the company's chief financial officer, said the firm will consider establishing its own manufacturing bases and merging with local foreign partners to achieve its goal on the international market.
Yang said the firm's current core competitiveness with international competitiveness is its manufacturing and design of PC products.
He added: "What we need to strengthen is the service and R&D capabilities in a move to increase our core competence in the future,"said Yang.
However, its step for overseas expansion is still fledgling, with only trial product sales in Europe and other regions. But its QDI-branded main board sold on the overseas market, making it the fifth largest main board in the world.
