Legend (0992) HOLD
Yesterday, PCCW and Legend have announced a strategic alliance for developing the broadband
business in the PRC. Under the agreement, Legend will co-operate exclusively with PCCW to
design, manufacture and distribute PCs with a built-in cable modem that will give users broadband
connectivity to the Internet. The PC, to be named Legend-NOW, will provide users with
one-touch access to PCCW's NOW network. Legend's portal, fm365.com will also provide a
link to NOW. The agreement does not, however, restrict Legend from forming alliances with
other partners to provide narrow-band Internet services.
Legend's R&D team, with support from PCCW, will develop set-top boxes with features
specifically designed for the Chinese market. Both the PCs and set-top-boxes will be sold
through Legend's sales network of over 2,000 distributors. Additionally, PCCW and Legend will
co-develop content and a broadband Internet service tailored for Chinese users.
This alliance is similar to the one formed by AOL and Gateway last year. We believe that both
PCCW and Legend will benefit from this alliance. In the short term, Legend will enjoy the revenue
from selling Legend-NOW PCs and set-top boxes. In the long term, Legend will benefit from the
enrichment of Internet content by co-developing the content with PCCW. More importantly,
PCCW will consider sharing Internet revenue with Legend if the alliance achieves a certain
number of subscribers.
PCCW will benefit by being able to accelerate the rollout of its broadband services in China. The
company believes that PCs will continue to be a major Internet access device in the near future.
Given that Legend has a 27.3% stake in China's PC market and an extensive distribution
network, PCCW can potentially attract more customers. Assuming 20% of the PCs sold by
Legend are Legend-NOW PCs, we estimate that PCCW can reach over 760,000 customers in
the coming two years.
Richard Li held out the possibility China Telecom may be brought in as a JV partner to lower
Internet subscription fees. Legend Conet recently co-operated with China Telecom by offering
users a one-year free unlimited Internet dial-up service.
Source: Bloomberg, Dao Heng Securities estimates
Entwicklung ist sehr schwer abzuschätzen...aber wie bereits gesagt...wer "interneten" will, braucht die entspr. Hardware. Angeblich haben Asiaten eine sehr eigene Mentalität; d.h. angeblich kaufen sie -wenn angeboten- zuerst eigene (Landes-)Produkte. Somit hat Legend die "Pole-Position"...Lassen wir uns doch überraschen...Ich bin seit 3.45€ in dieser Aktie mit 500 Stück dabei...die dürfen machen, was sie wollen...