STOCKWATCH: Legend sharply lower on weakness in global tech counters

HONG KONG (AFX-ASIA) - Legend Holdings Ltd shares were sharply lower at midmorning, pressured by the weakness in global technology stocks, dealers said. At 11:35 am, Legend was down 0.3 hkd or 5.45 pct at 5.20 on volume of 12.53 mln shares. The Hang Seng Index was down 425.83 points at 13,768.52. "Legend is highly correlated to the personal computer stocks in the U.S," an analyst at Vickers Ballas said. But the analyst said the selling in Legend, primarily driven by sentiment rather than fundamentals, is "overdone." "We think Legend is still strong, taking the major market share in personal computers in China," he added. Although domestic consumption in China is expected to continue growing, investors will compare the "relative valuation of Legend with global PC stocks," the analyst said. "It's unlikely that Dell Computer will double its PE in the short term, which means that Legend's valuation is also unable to go higher," he added. In addition, the company will be impacted by the uncertainties of its spin-off plan for unit Digital China, he said. In terms of fundamentals, the analyst said the company remains attractive, adding he gives the stock an "outperform" rating and a target price until December 2001 of 7.6 hkd. However, he said the company "has little upside potential in the short-term."

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