Standard & Poor`s affiliate CA Ratings has given JSE-listed Mustek a zaBB+ long-term rating and says while it falls short of being an "investment grade" in credit terms, it has a solid outlook for the next three years.
With Siltek`s financial woes fresh in the minds of investors, competitor Mustek is the first IT company in SA to make its CA Rating known.
The CA report says while the rating falls slightly short of the cusp termed "investment grade" in credit terms, there is a low degree of speculation on whether Mustek can meet credit obligations.
"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," explains the report.
The report acknowledged the tough market in which Mustek operates and says that while it competes against industry heavies such as Compaq, HP and Dell, Mustek`s Mecer PC brand has managed to maintain its market dominance.
Credit was also given to management`s commitment to a steady distribution strategy, as well as "astute procurement" and financial controls. "In the latter respect, Mustek has few equals in the broader IT industry," says the report.
The report also pointed to Mustek`s expanding customer base, which includes central and provincial government as well as the top layer of South African corporates.
The report ended by saying: "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."
News of the rating had a small, but positive, result on the company`s share price, climbing a little under 1% or 2c to 295c in the first trade of the day.
Share
