DBS maintains its 2000.HK buy rating with a target price of HK $0.90, mainly because of cheap valuations and smooth progress since the launch of China's 3G network, an area in which the company has been investing for the past two years and is finally in full swing after years of deliberation.

The stock fell 17.46 per cent to HK $0.52 yesterday because of weak results (net profit fell 40 per cent in fiscal 2008 from a year earlier). DBS said that demand visibility is expected to be low in 2009 and average selling prices will continue to be under pressure. But DBS added that it is not expected to write down inventories further for the time being, as Morning Technology is already actively supplying inventory.