Securities to lower earnings forecast if Legend makes amortization for goodwill

Legend have already realized the problem of making amortization of HK$1.9 bln for goodwill in the next fiscal year. But no decision has been made. Li Lan, general manager of Legend telecom department, said the company would not make amortization in this fiscal year.  Whether the amortization will start in next fiscal year depends on the results of consultation with accountants. A research report of BNP pointed out that Legend had acquired Legend (Beijing) with HK$20.9 bln in 1997, HK$1.9 bln of which had been for goodwill. Legend had not made any amortization or provision for the goodwill. BNP expected if Legend would make amortization for goodwill in 20 years, the earning forecast of 2002 would be lowered from HK$12.26 to HK$11.36 with net profit of HK$0.152 per share and the forecast of 2003 would be lowered from HK$17.01 to HK$16.11 with HK$0.216 net profit for each share. 

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