Legendary growth to continueLegend, China's largest personal computer maker, announced a major reshuffle of management Friday and pledged to double its turnover in the next three years.Yang Yuanqing, the former vice-president of the company, was appointed the new president and chief executive officer (CEO). Yang takes over the position from Liu Chuanzhi, who remains as chairman of Legend's board. Another five executive vice-presidents were also appointed during a plenary conference in Beijing. "Business in fiscal year 2000 has proved outstanding. With the new leadership, the company's turnover will hit 60 billion yuan (US$7.2 billion) in the next three years from the current 28 billion yuan (US$3.3 billion), with an annual growth rate of 50 percent," said Liu. Analysts said Yang's appointment was no surprise. Despite a glut of losses in financial reports for the 2000 fiscal year, Yang played a key role in expanding the company's sales of personal computers by 96 percent, hitting a record high 2.62 million units. This makes the company being ranked as Asia's largest and the world's ninth largest PC maker. The PC business is Legend's most important sector, contributing nearly 70 percent of the group's annual revenue. Sales of the company's other products, which include commercial PCs, servers, laptops, palm-sized PCs, set-top boxes and networking facilities, also defied the downturn in the network economy, reaching more than 40 per cent annual growth on average. "We're pleased with the results, which came in at the high end of our expectations," said Yang, the newly appointed CEO and president. "Our business' robust growth proved that domestic enterprises are actually stacking up their IT spending despite the grim outlook of the global IT industry," Yang said. Legend's high-speed growth will continue to be fuelled by China's strong demand for information products and value-added services, given the nation's under-developed IT industry and the huge market potential, Yang said. Legend has nearly one-third of China's PC market, which maks up 60 percent of its business turnover last year. According to a recent report from the International Data Center, China's domestic demand for PCs will see a 33-percent growth this year, rising from 7.13 million to 9.5 million. This suggests a rapidly-increasing customer base for Legend's PC business. With the help of McKinsey, an international consultancy company, Legend spent more than six months last year streamlining its business strategy for the next three fiscal years. It aims to be one of the world's 500 largest companies in the next 10 years. According to its three-year plan unveiled during the conference, Legend will spend over 1.8 billion yuan (US$216 million) on R&D (research and development) to keep its leading technology edge. "Still, our core business and major profit generator will be PCs, home-use or commercial desktops, laptops and motherboards," said Yang. "But we will give paramount priority to developing servers, handset products including personal digital assistances (PDA) and palm-PCs, and computer ancillary equipment." Over the long term the company will focus on the provision of information technology-based services, value-added services and business solutions for enterprises, he said. While continuing to maintain its dominant market presence in China, the company said it would aggressively expand worldwide as part of its goal to become a world-class IT company. "We will set up an R&D branch in Silicon Valley and establish more branches in the United States and Europe," said Yang. "Global markets will bring in about 20-30 per cent of our total revenues in 10 years." Legend remains the largest motherboard exporter on the mainland. The company's products are widely sold in Europe and the United States. Legend's upbeat financial results gave a boost to the generally dismal earnings season for domestic high-tech companies. Many industry analysts have raised the company's earnings forecast for this fiscal year starting from April 1. (Source: China Daily) |
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