Belle Chan, a technology analyst at Salomon Smith Barney in Hong Kong, says Great Wall's management has traditionally been more reactive than proactive, at least compared to Legend, the No. 1 computer maker in China by a wide margin. The company is talking about a two-pronged strategy to take advantage of the expected strong growth in Internet access and activity in China. Part two of the plan is to become an Internet access provider for Chinese seeking the kind of broadband connection that allows for fast downloading of large quantities of information like music or movies. The company projects that it will have 1 million broadband customers by the end of next year rising to 5 million by the end of 2003. That's ridiculous, say many analysts, who note that the U.S. today has only 4 million broadband customers.
Investors seem to agree.
Perhaps Great Wall realizes it is over-reaching. That's a good sign. Most investors never bought into the company's huge prospective investment in a project with dubious potential for returns. Chinese SOEs aren't known for responding to investor sentiment so directly. Still, Merrill Lynch last week downgraded its earnings estimates for the company going forward to 2001.