Press Release
Share code : MST ISIN CODE : ZAE 000012373
CA-Ratings announces that it has assigned a credit rating to Mustek Limited
after a full interactive investigation based on the normal rating mandate.
The rating is on the national scale for South Africa and is zaBB+ long term,
with a stable outlook for the three-year time horizon.
The rating symbol indicates that while Mustek is viewed to be just short of
the cusp termed investment grade in credit terms on the South African
national scale, the degree of speculation in its ability to meet obligations
is very low compared to other South Africa obligors. This is a very good
result given the risks and pressures evident in the highly competitive
industry wherein Mustek operates.
Compared to other companies listed on the JSE Securities Exchange, Mustek is
viewed to occupy a median position, which means that the number of companies
with a credit strength above it is similar to the number of companies with a
credit strength below it. This view is based on CA-Ratings opinions on all
listed entities.
Mustek is the first IT company in South Africa to be rated and to make it's
rating known publicly.
The assembly and manufacture of PCs is an extremely competitive industry not
only in South Africa but also across the world. Competitors like Compaq (to
be merged with Hewlett-Packard) and Dell as well as smaller brands like
Fujitsu-Siemens and Packard-Bell compete head on with Mustek in South Africa
and yet the Mustek Mecer brand has been able to achieve and retain market
leadership. This strength is ascribed partly to the commitment of owner-
management and the distribution strategy that has consistently been applied
for a number of years but also to extremely astute procurement and tight
financial controls inter alia on the quality of trade receivables. In the
latter respect Mustek has few equals in the broader IT industry.
Even before the recent demise of a competitor in the same industry Mustek
was expanding its customer base to include entities previously closed to it.
These include departments of central and provincial government as well as
the top layer of South African corporates.
Mustek is a WinTel company enjoying close relationships with Microsoft and
Intel and was recently able to roll out its first Intel Pentium 4 machines
during August 2001 in step with the rest of the world. Its links to the
producers of memory and other PC components in the Far East are proven and
have been a major strength in cost-containment terms.
Issued by CA-Ratings Johannesburg
Contact person : Charl Kocks
Tel : 011 442 4233
Fax : 011 442 4236
Pagers 011 780 8958 or 780 8963
Mobile : 082 650 5836
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