STOCKWATCH: Legend sharply lower on profit-taking after unit listing plan

HONG KONG (AFX-ASIA) - Legend Holdings Ltd shares were sharply lower on profit-taking after the company confirmed a proposal to spin off and list unit Digital China in Hong Kong, dealers said. They added that losses on NASDAQ and a profit warning by Intel also undermined sentiment towards the stock. Legend was down 0.35 hkd or 5.98 pct to close at 5.5 hkd on a turnover of HK$25.14mln. An analyst with a regional securities firm said investors were mainly taking advantage of recent gains by Legend on speculation about Digital China's spinoff and listing. "The plan was confirmed and investors rushed to lock in profit. That was no surprise," the analyst said. He added that he considers the spinoff of Digital China neutral to Legend. "To my knowledge, Digital China has been operating independently from Legend's PC manufacturing and sales sector. The spinoff plan makes little differ ence," the analyst said. He said that Ditigal China accounts for about 15 pct of Legend's total net profit. "With Legend's PC sales in China continuing to grow, the spinoff of Digital China is not expected to have much impact on Legend's profitability," he added. He said that he has a 12 month target price of 7.40 hkd for Legend.

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