Lenovo 0992

Lenovo 0992

Postby winston » Fri May 23, 2008 9:20 am

Notebooks drive Lenovo record profit
Karen Wong
Friday, May 23, 2008

The net profit for the largest computer seller in Asia, Lenovo Group (0992), has tripled to a record US$484 million (HK$3.77 billion) from US$161 million last year driven by strong sales growth.

"In the past three years since the acquisition of IBM PC division, Lenovo has achieved the financial targets which we set before the acquisition," said chairman Yang Yuanqing.

The company said it recorded total sales of about US$16.4 billion, up 17 percent from US$13.9 billion the previous year.

Lenovo's notebook computers accounted for about 58 percent of the group's sales. With demand for notebook computers increasing, the company sees continuing growth in this segment.

Yang said he expects double-digit growth in personal computer sales in the coming year.

Earnings were also boosted by the disposal of its mobile handset business, recording a pre-tax gain of some US$65 million.

Gross profit margin has improved to 15 percent from 13.5 percent.

"Lenovo has been growing quite strongly in Europe, after extending its sales network and getting more business clients," said Jenny Lai, Taipei-based analyst at CLSA.

"The question is whether the growth can continue, given the uncertainties in the global economy," Lai said. Lenovo is No 4 in the worldwide PC market after gaining 0.4 percentage points, accounting for a total 7.6 percent of the overall market.
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Re: Lenovo 0992

Postby winston » Fri May 23, 2008 12:00 pm

Unfortunately, they do not have Puts..

==============================

BROKER CALL - Lenovo's share price to come under pressure - Goldman Sachs

BEIJING (XFN-ASIA) - Goldman Sachs said it expects Lenovo Group's share price to respond negatively after the company posted a 1.7 percentage point drop in its fiscal fourth-quarter to March operating margin.

Goldman Sachs also noted that Lenovo is having a tough time in the US market, and as a result other markets such as Greater China, Europe and the Middle East are key to its growth.

"We believe the share price will respond negatively to the operating margin disappointment," Goldman Sachs said.

"Furthermore, with looming challenges from the US market, we believe continued market share gains in Greater China and emerging markets and reduced operating expenses are key to sustaining earnings growth in the future," it said.

Lenovo recorded a 13.5 pct increase in personal computer (PC) sales in the fourth quarter, with Greater China sales up 18.3 pct and Europe, Middle East and emerging markets up 20.1 pct. Sales growth in the Americas was only 2.9 pct, Goldman Sachs said.

It added that its operating margin was hit by the unfavorable economic market in the US. Still, Lenovo said it will speed up its consumer business in the US, despite the challenging operating environment, Goldman Sachs noted.

Separately, Morgan Stanley said it is maintaining its "equal-weight" rating on Lenovo.

Morgan Stanley also raised its target price on Lenovo to 6.0 hkd.

Lenovo's Hong Kong shares were down 4.65 pct at 6.15 hkd this morning.
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Re: Lenovo 0992

Postby kennynah » Fri May 23, 2008 1:48 pm

i still think that the options market in asia is very lacking and rather lopsided to the issuer's advantage.. :roll:
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Re: Lenovo 0992

Postby winston » Mon Jul 21, 2008 9:18 pm

IBM targets $622m from latest sale of Lenovo shares

IBM is seeking to reap HK$622.8 million by selling 116.194 million shares of mainland computer maker Lenovo (0992) in a share placement.

IBM is offering the shares at HK$5.19 to HK$5.36 a piece. The price range represents a discount of 4.1 percent to 7 percent to Lenovo's closing price of HK$5.58.

The shares being offered represent a 1.3 percent stake in the company.

After the sale, IBM's stake in Lenovo will be reduced to 4.7 percent, from the current level of 5.96 percent. Citibank is the sole bookrunner for the sale.

STAFF REPORTER
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Re: Lenovo 0992

Postby winston » Tue Jul 22, 2008 2:43 pm

Not vested. But they have very good after-sales service in China though..

================================

Lenovo Group tumbled 5 percent to HK$5.30 on reports that IBM is selling a 1.3 percent stake in the Chinese PC-maker. IBM is offering 116 million shares at HK$5.19 to HK$5.36 apiece, according to IFR Asia. Citigroup is handling the sale, IFR said.

JPMorgan today cut its rating on Lenovo to "neutral" from "overweight" and its price target on the stock to HK$6.10 from HK$7.00 on concerns sales would decline due to the slowing Chinese economy and bleak corporate spending in the United States.
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Re: Lenovo 0992

Postby winston » Mon Jul 28, 2008 8:34 am

Not vested.

Keys to the future
Alfred Liu
Monday, July 28, 2008

Computer maker Lenovo Group (0992) plans to focus on developing emerging markets while further strengthening its mainland business after reaping the fruits of its acquisition of IBM's personal computer business three years back.

Lenovo reported revenues for the fiscal year ended March 31 rose 17 percent to US$16.4 billion (HK$127.92 billion), with net profit skyrocketing 200.6 percent to a record US$484 million from US$161 million the previous year.

Gross profit margin climbed to 15 percent from 13.5 percent.

Chief financial officer Wong Wai- ming said the cost pressure brought on by restructuring was over, as 2007/08 was already the third year after the IBM acquisition.

Commenting on the colossal 200.6 percent jump in net profit, Wong conceded it would be difficult for Lenovo to achieve such impressive growth again this year.

He added that the group's target is to outperform the market average for growth. To achieve this, Lenovo will concentrate its development on fast- growing markets including Africa, Middle East and East Europe; as well as boost its market share in the mainland.

Wong said emerging markets are different from those that are already mature. For emerging markets, international brands may not be able to make inroads, but the market share of local brands may be larger.

Lenovo - based in Beijing and North Carolina - believes its experience in operating in the mainland market will help it in developing new markets while continuing to strengthen it'ss market position in the mainland.

Wong said the company's market share in the mainland exceeds 20 percent, particularly in coastal cities. Now it aims to tap inland and rural parts of the country to maintain growth.

In addition, it hopes to improve its distribution network to reach more customers.

"Five to six years ago, chairman Yang Yuanqing already saw the importance of the distribution network. When our competitors concentrated on developing first-tier cities like Beijing, our management team already started to expand in second-tier cities," Wong said.

"Today, Beijing is surely different than it was five to six years ago. But, today's Chongqing is even much more different from the one five to six years ago. Our foundation of distribution network is better than our competitors."

Wong said Lenovo still intends to expand its penetration in developed markets such as the United States and Europe, which currently are relatively small.

With its acquisition of IBM's personal computer unit, Lenovo became the world's third-largest computer manufacturer after Hewlett-Packard and Dell.

Wong said Lenovo expects its growth in America to be slow as the US economy is weakening, so the company has to focus on improving its operational efficiency to achieve better results. But the group anticipates its business growth in Europe will be better than that of its competitors on average.

Wong said half of Lenovo's business is from non-US dollar zones. Since gross profit margin in non-US dollar zones is higher as the greenback is weakening, the company's revenues will grow stronger in the weak US dollar environment.

Lenovo is looking to improve its operational efficiencies in its eurozone business similar to what the company is doing in the mainland.

But Wong stressed, raising operating efficiencies would not involve cutting staff. The group seeks to achieve its aims by enhancing its research and development and logistics.

Lenovo's net profit margin last year was 3 percent. Wong noted there was still room to improve the margin even though competition in the PC business was fierce and companies were being pressured to cut prices.

But he believes companies are cutting prices due to more new models coming on stream, therefore prices of older models need to be reduced in order to clear inventory.

"The personal computer business is not shrinking, but actually developing. Computers are turning from luxuries into necessities,"
Wong said.

The company is confident in dealing with the pressure of operating in the highly competitive PC market.

"Like the mobile phone business, operators can still earn money even if the price of a cell phone dropped from the more than HK$10,000 when the device was first launched [in the early 1990s] to around the few hundred dollars of today," Wong said.
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Re: Lenovo 0992

Postby winston » Mon Jul 28, 2008 8:57 am

Not vested.

Some sell, others buy back
Monday, July 28, 2008

IBM, once a substantial shareholder of Lenovo, has been gradually reducing its stake in the company by selling its stock on seven occasions since last year.

But Lenovo's chief financial officer Wong Wai-ming insists that both companies still enjoy a close relationship, working together to develop computer servers and other high-end products.

On February 29, IBM sold 116.2 million shares in Lenovo at HK$5.41 apiece. On April 22, it offloaded another 116.2 million shares at HK$5.61 per share.

Last week, IBM sought to raise up to HK$623 million by selling a further 116.2 million Lenovo shares at between HK$5.19 and HK$5.36 a share.

Including this latest disposal, IBM's stake in Lenovo fell to 4.7 percent - which is below public disclosure requirements - from 11.8 percent in February 2007.

Lenovo, on the other hand, has been buying back its shares.

This year, the company bought back more than 100 million shares at an average price above HK$5 per issue.

Wong said the buyback activities are positive for shareholders when the stock price is not at a reasonable level.

The funds earmarked for share buybacks are small compared to the company's cash on hand, he said.

As at March 31, Lenovo had more than HK$16 billion cash on hand.

JPMorgan recently downgraded Lenovo to "neutral" from "overweight," with a target price of HK$6.10, down from HK$7, due to an expected near-term slowdown in revenue from China and very modest sales growth in the US.
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Re: Lenovo 0992

Postby winston » Fri Aug 08, 2008 9:46 am

Not vested.

HK-listed Lenovo Group Q1 to June net profit 110.49 mln usd vs 71.57 mln

HONG KONG (XFN-ASIA) - Lenovo Group Ltd first quarter to June results:

Sales - 4.21 bln usd vs 3.81 bln

Net profit - 110.49 mln usd vs 71.57 mln

EPS - 1.25 US cents vs 0.84 cents
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Re: Lenovo 0992

Postby winston » Fri Sep 26, 2008 11:03 am

Not vested.

STOCK ALERT PC maker Lenovo falls sharply in HK as broker cites short-term risks

HONG KONG (XFN-ASIA) - Lenovo Group Ltd shares were sharply lower after JP Morgan cited short-term risks for the personal computer maker and reiterated a "neutral" stance on the stock.

At 10:31 am, the stock was down 0.25 hkd or 6.4 pct at 3.65.

JP Morgan said in a brief note that Lenovo still faces short-term risks, including weakening demand from mainland enterprises and individual consumers
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Re: Lenovo 0992

Postby iam802 » Fri Nov 07, 2008 2:33 pm

Lenovo Profit Falls 78%, Missing Estimates, on U.S.

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

Nov. 7 (Bloomberg) -- Lenovo Group Ltd., China's biggest personal-computer maker, posted second-quarter profit that was a third of analysts' estimates after the company lost market share and U.S. customers reduced purchases amid the slowing economy.

Net income plunged 78 percent to $23.4 million, or 0.25 cents a share, in the three months ended September 30, from $105.3 million, or 1.12 cents, a year earlier, the Raleigh, North Carolina-based company said in a statement to the Hong Kong stock exchange today. Lenovo was expected to post profit of $75 million, according to the median of five analyst estimates in a Bloomberg survey.

Demand from U.S. clients slipped as slowing corporate and retail spending amid financial market turmoil pushed the world's biggest economy to the brink of recession. Lenovo, the maker of Thinkpad laptops, trailed bigger rivals Hewlett-Packard Co., Dell Inc. and Acer Inc. in adding lower-cost products and lost market share in Asia and Europe.

``They have a big exposure to the U.S. corporate PC market, and the weakness will persist for several more quarters,'' Charles Guo, who rates Lenovo shares ``neutral'' at JPMorgan Chase & Co. in Hong Kong, said before the announcement. ``The company has been slow in getting into the consumer market.''

Sales from continuing operations rose to $4.33 billion from $4.31 billion, compared with the $4.4 billion median estimate in the Bloomberg survey.

Lenovo fell 2.8 percent to HK$2.45 at the midday break in Hong Kong trading before the announcement. The stock has declined 65 percent this year, compared with a 50 percent drop in the city's benchmark Hang Seng Index and a 21 percent decrease in Acer's shares.

PC Shipments

Lenovo, which moved its headquarters to the U.S. after buying International Business Machines Corp.'s PC unit in 2005, said sales in the Americas region, its biggest outside China, fell to $2.16 billion in the six months ended September, from $2.33 billion a year earlier.

The Chinese company's share of global PC shipments fell to 7.4 percent in the three months to September, from 7.9 percent in the previous quarter, according to research company IDC.

Acer, which overtook Lenovo as the third-biggest PC maker after acquiring Gateway Inc. and Packard-Bell BV, increased its market share to 12.5 percent, from 9.3 percent a year earlier, IDC said. The Taiwan company gained sales after introducing so- called netbook laptops aimed at tapping demand for smaller computers, according to the Framingham, Massachusetts-based researcher.

Netbook Laptops

Lenovo started selling netbook laptops last month as part of plans to expand its product offering for consumers. Hewlett- Packard, the biggest PC maker, offered the products from April, while second-placed Dell followed in September.

Lenovo derives more than 90 percent of its sales outside of China from corporate customers, according to JPMorgan's Guo.

Six-month revenue in China, Taiwan and Hong Kong rose 16 percent to $3.62 billion, Lenovo said.

Lenovo increased sales in Europe, Middle East and Africa 9 percent to $1.79 billion, according to the statement.

Cisco Systems Inc., the world's biggest maker of networking equipment, this week forecast a 10 percent drop in quarterly sales, underscoring concerns that companies will pull back technology spending amid the financial crisis.

Dell, based in Round Rock, Texas, said in August that weakening technology spending in the U.S. may have spread to Europe and Asia.
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