Lenovo 0992

[millionairemind]

February 5, 2009, 2.11 pm (Singapore time)

Lenovo reports loss, CEO resigns

BEIJING - Chinese computer maker Lenovo Group announced a US$96.7 million loss on Thursday for the latest quarter due to a fall in sales and said chief executive William J Amelio resigned in a management reshuffle.

Mr Amelio will be succeeded by Lenovo chairman Yang Yuanqing, the company said. It said Lenovo founder Liu Chuanzhi would return as chairman.

Lenovo, the world's fourth-largest PC manufacturer, said global shipments fell 5 per cent in the October-December quarter.

'The Group's results were impacted principally by slowdown of the Chinese PC market in which it has significant market share; and demand reduction in the worldwide commercial PC segment,' the company said in a statement.

Lenovo, which bought IBM Corp's PC unit in 2005, warned in January that it expected a quarterly loss due to a restructuring that would involve cutting 11 per cent of its workforce, or about 2,500 jobs. The restructuring was launched after profits in the previous quarter plunged.

Lenovo has been hit especially hard by the global economic slump because it relies heavily on corporate sales, where spending has fallen dramatically.

Source: AP

[winston]

DJ MARKET TALK: Too Early To Buy Lenovo, No Sign Of Recovery-HSBC

1104 [Dow Jones] STOCK CALL: HSBC says it's too early to buy Lenovo (0992.HK) as "the downturn might take longer, with no sign of recovery now." Keeps Underweight with target HK$1.14. Says, Lenovo will post loss in fiscal 4Q09 even before US$120 million restructuring expense.

Adds, at HK$1.49 (closing price on Feb. 17), Lenovo is trading at 26X FY10 P/E and 1.3X FY10 P/B, higher than Acer's (2353.TW) 9X P/E and Asustek's (2357.TW) 11X P/E.

"Due to IT spending cuts, corporate customers are more cautious and trying to extend their PC working life. Lenovo's price cut did not generate extra demand, and it suffered a huge loss in FY3Q09. However, Lenovo thinks the worst is past, at least for the commercial segment." Stock +0.7% at HK$1.50.

[winston]

DJ MARKET TALK: Lenovo +2.0%; Rural China Plan To Boost Sales-DBS

1017 [Dow Jones] Lenovo (0992.HK) +2.0% at HK$1.50, vs HSI's 0.9% fall, after news company to tap spending power of rural population with low-cost computers and 700 new retail stores, taking advantage of government stimulus plan giving rural residents subsidies worth 13% of price of electronic goods purchased from participating companies.

"This is likely to boost Lenovo's sales, as company could sell its low-cost and relatively outdated computers to rural areas, which is a smart move," says Peter Lai at DBS. Lenovo's vice president Xia Li says it's ready to offer computers to 320,000 villages, benefiting 5 million village households in next 3 years. 20-day moving average, intraday high of HK$1.52 as immediate cap

[winston]

Another sign of greenshoots..

DJ MARKET TALK: Lenovo FY09 Loss Tipped At US$170.9 Mln - Poll

1057 [Dow Jones] PREVIEW: Lenovo (0992.HK) appears set to swing to loss of US$170.9 million for fiscal FY09 ended March 31 vs FY08 profit at US$484.3 million, according to average forecast from Dow Jones poll of 6 analysts.

FY09 loss to include US$150 million pretax restructuring charge in 4Q to help smooth FY10 earnings. With loss widely expected, stock's direction set to depend on company's guidance for fiscal 1Q, with analysts saying it's too early to determine if Lenovo's business has bottomed.

Shares down 1.3% at HK$3.07 vs HSI down 1.3%.

[winston]

So, where are the green shoots coming from ? This company is a direct beneficiary of the government stimulus program to encourage the rural people to buy a PC..

DJ MARKET TALK: Lenovo Pft-Taking Likely, Accentuated By 4Q Loss

0737 [Dow Jones] Lenovo's (0992.HK) ugly 4Q results likely to serve as reminder that investors probably pricing in too much in way of the recovery scenario for not only Lenovo, but overall corporate earnings.

China's largest PC maker swings to 4Q net loss of US$264 million vs US$140 million net profit year ago, due to hefty restructuring charges, weak demand; FY net loss at US$226.4 million, wider than US$170.9 million pegged by 6 analysts polled by Dow Jones.

While some analysts optimistic there could be demand pickup later this year, Lenovo expects market conditions to remain "very challenging." Final dividend omitted vs 12.8 HK cents/share year earlier. Stock down 3.9% at HK$2.99 yesterday, but still more than double vs March 9 close of HK$1.45, heavy profit-taking likely to emerge today; 10-day moving average at HK$2.90 most likely will be breached.

[winston]

After the rebates to the rural folks, where would future growth be coming from ?

UPDATE 1-Lenovo Q1 beats expectations on China strength

* Q1 net loss $16 mln versus forecast of $54 mln
* Says operating environment remains challenging
* Further investment in China to further expand there
* Shares up over 80 pct this year vs. 40 pct on main board

TAIPEI/HONG KONG, Aug 6 (Reuters) - The world's No. 4 PC brand, Lenovo (0992.HK), reported a smaller-than-expected first-quarter loss on Thursday, thanks to China's massive stimulus package and further boosting hopes of a rebound.

Lenovo said it made a net loss of $16 million in the April-June quarter, its third straight quarterly loss but better than market expectations for a $54 million loss and narrowing from the previous quarter's $264 million loss.

"As the global economy remains uncertain, enterprise customers are still conservative about PC spending," Lenovo said in a statement filed to the Hong Kong stock exchange.

"Lenovo will leverage its well-established core strengths in China and continue to invest in the market to further expand its leadership and profitability."

The company will hold a conference call with reporters at 0330 GMT to discuss its outlook for the current quarter.

Analysts say Lenovo has been worse hit than rivals such as Acer (2353.TW) and HP (HPQ.N) in the current downturn because of its reliance on corporate spending, stemming from its purchase of IBM's (IBM.N) laptop PC arm in 2004.

Revenue fell more than 17 percent from the same period last year to $3.46 billion, as tech spending plunged as a result of the global downturn, and it was further hit by rapidly declining prices amid the growing popularity of low-cost netbook PCs.

China accounted for about 48 percent of the company's sales in the last quarter, which saw a 14 percent increase in sales from 2008, as the company turned its focus back to its traditional stronghold of China and other emerging markets.

Optimism that Lenovo would be able to bank on that leadership position to ride out the current downturn has pushed its shares up more than 80 percent this year, compared with a 40 percent advance on the benchmark Hang Seng index .HSI.

The company has been one of the biggest beneficiaries of China's move to encourage consumer spending, with almost half of all computers sold under a rural subsidy programme in the first six months of this year carrying its brand name.

In contrast, bigger global players such as HP and Acer took less than one percent of sales under the programme, while Dell (DELL.O) and Asustek (2357.TW) didn't sell a single PC.

Lenovo also managed to grow its share of the global PC market in the April-June quarter by 0.5 percentage points to 8.7 percent, research firm IDC said, reversing consecutive quarters of ceding market share.

The PC sector has been showing early signs of a recovery in recent months, with shipments in the second quarter of this year falling less than expected, and chipmaker Intel (INTC.O) declaring that the worst was over for the industry.

The company announced the results before the Hong Kong stock exchange opened for trade on Thursday. Its shares were down 7.12 percent, lagging a 1.45 percent decline on the main board.

[winston]

Not vested.

Stakeholder to sell 29 pct of Lenovo parent for $404 mln

BEIJING, Aug 10 (Reuters) - A state-run shareholder of Lenovo's (0992.HK) parent company aims to sell a 29 percent stake in the parent firm for 2.76 billion yuan ($404 million), the company said on Monday.

The asset management unit of the Chinese Academy of Sciences, which holds a 65 percent stake in Legend Holdings, the parent company of Hong Kong-listed Lenovo, is seeking an investor to help improve management of the firm, a spokeswoman for Legend Holdings said.

"It is meant to improve the corporate governance structure of Legend Holdings and to introduce more resources from new investors," she said, adding that the planned share sale is in line with the academy's push to make its subsidiaries more market-oriented.

The bidder should have no less than 4 billion yuan of registered capital and its major business should cover finance, energy and real estate, the spokeswoman said, without giving further details.

Lenovo, formerly known as Legend, is now the world's fourth-biggest computer and was founded in 1984 as a spin-off of the Chinese Academy of Sciences. The company started as a distributor for foreign brands and began its own production in 1990.

[winston]

China, emerging markets key to Lenovo strategy by Derek Yiu, The Standard HK

Lenovo Group (0992) - the mainland's largest computer manufacturer - said it will concentrate on the domestic and emerging markets as mature markets continued to drag down its profit.

In the last financial year with the global economy in crisis, Lenovo fell into the red worldwide except for Greater China where it recorded an 8 percent shipment growth.

Founder Liu Chuanzhi returned to Lenovo in February as chairman and changed the organizational structure into three segments - China, emerging markets and mature markets - based on strategic direction and market dynamics.

The company said earlier this month its focus will be on the mainland and Eastern Europe.

Chief financial officer Wong Wai- ming said China has showed signs of a rebound and will be the first country to recover. China was the only individual segment with operating profit for the three months to June, rendering a smaller loss quarter-on-quarter.

Wong declined to treat the group's acquisition of IBM and subsequent international development as failures.

"In order to succeed in the long run, we cannot depend on a single market," Wong said. "Relying on the Chinese market may give us a short-term advantage, but neither this nor luck is sufficient for long-term success."

Wong said the group recorded PC sales growth owing to growing demand from emerging markets. Lenovo has recently made headway in market share in Russia, Turkey and Latin America. Emerging markets as a whole accounted for 14 percent of first-quarter group sales.

[winston]

Lenovo slid 5.5 percent to HK$3.46 after a major shareholder in the world's No. 4 PC maker sold 292 million shares at a discount of 2.5-3 percent from Tuesday's close. It was the most heavily traded stock of the morning.

[winston]

Lenovo Shares Tumble After TPG, Newbridge Sell Shares (Update2)
By Cathy Chan and Mark Lee

Sept. 9 (Bloomberg) -- Lenovo Group Ltd., China’s biggest maker of personal computers, fell the most in more than a month in Hong Kong trading after TPG Inc., General Atlantic LLC and Newbridge Capital LLC sold shares.

Lenovo dropped 5.7 percent to HK$3.45 at the close of trade on Hong Kong’s stock exchange, the biggest drop since Aug. 5. The buyout firms raised HK$1.03 billion ($133 million) selling 291.5 million shares at HK$3.55 apiece, according to a sales document.

Connie Ling, a Hong Kong spokeswoman at Goldman Sachs Group Inc., the sale’s arranger, declined to comment.

( GS was very positive on this stock a few months ago )

http://www.bloomberg.com/apps/news?pid= ... o0Cml9oV0Y