Lenovo 0992

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DJ MARKET TALK: SHKF Starts Lenovo At Buy; HK$8.55 Target

0900 [Dow Jones] STOCK CALL: SHK Financial starts Lenovo (0992.HK) at Buy with a target price of HK$8.55.

The house says the company's valuation continues to be capped on negative sector sentiment, but "we expect a positive re-rating, as the PC industry comes off cycle lows, with Lenovo positioned to benefit."

It adds, Lenovo management's strong execution, has resulted in consistently improving margins and ROE.

SHKF says Lenovo will announce fiscal 2Q results (ended September) on Nov. 2; it notes that fiscal 2Q and 3Q are Lenovo's seasonally strongest quarters, and the results may be a short-term catalyst.

It adds, completion of Lenovo's Wuhan mobile phone factory in October 2013 and ramp up of production could be a catalyst for its mobile business to move from posting losses to profits.

Source: Dow Jones & Company, Inc.

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Lenovo Sees Global PC Slowdown as Reason to Sell Smartphones

Lenovo Group Ltd. (992) said slowing demand in the personal-computer market, where it overtook Hewlett-Packard Co. (HPQ) as the global leader last quarter, is good reason for the company to expand into smartphones.

Lenovo is already the second-largest smartphone maker in China and plans to seize the top spot from Samsung Electronics Co., Milko Van Duijl, president for the Asia-Pacific and Latin America regions, said in Hong Kong today.

“Our goal is definitely to get to number one and not only to take smartphones into the China market but also into emerging markets.”

The company, founded in China in 1984 with the equivalent of $25,000, has expanded its market value to $8.4 billion, helped by takeovers including International Business Machines Corp.’s PC unit in 2005. Van Duijl said Lenovo just began selling handsets in Indonesia and India will follow, as Chief Executive Officer Yang Yuanqing moves closer to his goal of extending its PC dominance to smartphones and tablet computers.

“Despite the challenges in the global PC market, Lenovo continues to expand in both emerging markets and mature markets at the expense of its competitors,” Miles Xie, a Hong Kong- based analyst with Bocom International Holdings Co., wrote in a report today.

Lenovo’s efforts are allowing the company to “rapidly expand its market share in the China smartphone market,” wrote Xie, who has a buy rating on the shares.

Lenovo, whose headquarters are in Beijing and Morrisville, North Carolina, fell 0.4 percent to HK$6.30 at 11:11 a.m. in Hong Kong trading. The city’s Hang Seng Index rose 0.6 percent.

Definite Easing

“There is definitely a slowdown in the market in all parts of the world, however, we are so strong in China that was a good reason for us to expand into smartphones,” Van Duijl said of the PC market in an interview with Bloomberg Television.

In China, Lenovo has a smartphone market share of 11.5 percent, surpassing that for the iPhone, Van Duijl said, without giving a figure for the Apple Inc. (AAPL) device.

As Lenovo expands in mobile devices, the company will build its own cloud-computing services and online store to create an ecosystem for the products, he said. Lenovo won’t make its own mobile operating system and will stick with Google Inc.’s Android and Microsoft Corp.’s Windows 8, Van Duijl said.

Worldwide PC shipments fell 8.3 percent from a year earlier to 87.5 million in the third quarter, according to Stamford, Connecticut-based Gartner Inc.

Temporary Slowdown

Lenovo sees the PC market slowdown as temporary, Van Duijl said. Global PC shipments will rise to 530 million units within two to three years, from 350 million units now, he said.

Lenovo accounted for 15.7 percent of global PC shipments last quarter, overtaking Hewlett-Packard, with 15.5 percent, for the first time, Gartner said Oct. 10.

The Chinese company narrowed Hewlett-Packard’s lead in the quarter with a market share of 15.7 percent, compared with 15.9 percent for the Palo Alto, California-based maker, according to IDC, another market researcher.

IDC’s study included so-called workstations, the more powerful desktop devices used for such tasks as engineering, architecture and video-game development.

CEO Yang said Lenovo will take steps to become the “clear leader” in PCs and leverage that dominance to head the market for mobile devices in what he called the “PC-plus era.”

“Becoming the clear leader in global PC share of course remains one of Lenovo’s aspirations, but it also only represents one more milestone in our journey as a company and our mission to become the leader in the PC+ era,” Yang said in e-mail on Oct. 11. “This includes PCs, tablets, smartphones, smart TVs, cloud and enterprise computing.”

Lenovo is still at least two years away from making “meaningful inroads” in mobile devices in the U.S. or Europe, said Jean-Louis Lafayeedney, an analyst at JI Asia in Hong Kong.

“Undoubtedly, Lenovo’s market share gains against competitors has been impressive” in PCs, Lafayeedney said in an e-mail. “In terms of tablets and smartphones, the company has yet to prove it can extend its reach beyond China and some periphery countries.”

http://www.bloomberg.com/news/2012-10-1 ... hones.html

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Citi expects LENOVO GROUP (00992.HK) NP to beat estimate on strong PC profitability in emerging market

Citigroup noted in a report that LENOVO GROUP (00992.HK) is about to release the quarterly results ended September, and the Bank expects that the sales will be in line with market consensus, and the net profit may beat estimates due to the strong profitability of PC business in the emerging markets.

The Bank estimates that Lenovo's quarterly sales and earnings will be US$8.66 billion and US$159 million.

Although China's overall PC demand has still not recovered in the third quarter, the bottom should have been seen in the second quarter.

In the short run, the Bank holds prudent views toward the PC market in China, but the PC business accounted for less than 45% of Lenovo's income during the same period last year last year.

A Buy rating is given, with target $7.8.


Source: AAStocks Financial News

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DJ MARKET TALK: Lenovo Group 2Q Profit Expected To Grow - Analysts

1001 [Dow Jones] Analysts expect Lenovo Group Ltd. (0992.HK) to report profit growth for the fiscal second quarter through September later Thursday, even though the overall PC industry is struggling with weaker demand for desktop and laptop PCs , amid the global economic slowdown and popularity of tablet computers and smartphones.

Ten analysts polled by Thomson Reuters forecast a net profit of $154.62 million for the quarter, up 7.4% from $143.92 million for the same period a year earlier.

Daiwa Capital Markets says in a report this week that it forecasts a net profit of $156 million for the second quarter and expects the third quarter through December to be another strong quarter for Lenovo.

Source: Dow Jones & Company, Inc.

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DJ Lenovo Group Second-Quarter Net Rises 13% As PC Sales Grow

HONG KONG--Chinese personal-computer maker Lenovo Group Ltd. (0992.HK) said Thursday that its net profit for the three months through September rose 13% from a year earlier as its PC sales continued to grow.

Net profit for its fiscal second quarter rose to $162.1 million from $143.9 million a year earlier, beating analysts' forecast for a net profit of $154.6 million.

Revenue for the quarter rose 11% to $8.67 billion from $7.79 billion a year earlier.

Lenovo's solid earnings stand out in the global PC industry, which is struggling with weak demand as more consumers spend their dollars on new tablet computers and smartphones instead of desktop and laptop PCs.

Given the changing market environment, PC makers are under pressure to strengthen their offerings of mobile gadgets.

Even so, Lenovo has been outperforming rivals such as Hewlett-Packard Co. (HPQ) and Dell Inc. (DELL). In the quarter through September, Lenovo's PC shipments rose 10% from a year earlier, while shipments at H-P and Dell declined 16% and 14% respectively, according to research firm IDC.

The data from IDC also showed that total worldwide PC shipments for the quarter declined 8.6% from a year earlier.


Source: Dow Jones & Company, Inc.

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DJ MARKET TALK: Lenovo's Smartphone Business A Swing Factor - Citi

1021 [Dow Jones] Citi says Lenovo (0992.HK) management was bullish on the prospect of profitability in the China smartphone business within the next two to three quarters, but "we are unsure if Lenovo can make sustainable profits in the smartphone business longer term due to fierce competition from white-box makers and Internet companies (which require very little or even no margin)."

The house says it does believe losses from this business division will narrow significantly in the near term due to increasing scale and improving mix.

"We believe this could swing as a re-rating or de-rating factor for Lenovo's share price depending on its ability to demonstrate sustainable profitability in a very challenging smartphone industry in China."

It keeps Lenovo at Buy with a HK$7.80 target.

Source: Dow Jones & Company, Inc.

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Lenovo aims to raise EMEA margins by 50 percent: executive

DUBAI (Reuters) - Lenovo Group Ltd, on track to become the world's top PC maker, has bolstered its presence in Europe, the Middle East and Africa (EMEA) and aims to raise regional operating margins by about 50 percent, a top company executive said on Wednesday.

The Chinese company's profit growth slowed in the second quarter, although it beat expectations and outpaced results from its main rivals, such as Hewlett-Packard Co, Dell Inc and Acer Inc.

Yet uncertainty over the future of the PC market - seen by some analysts as a ‘sunset' industry - has spurred Lenovo to expand into mobile computing and smart phone handsets.

The company's operating margin in EMEA was 2 percent in the second quarter and it aims to raise this to 3 percent "in the next 18 months - by the end of the next financial year", Gianfranco Lanci, Lenovo president for the EMEA region, told Reuters.

He said these gains were achievable because the company had already beefed up its operations in the Middle East, Eastern Europe and the former Soviet Union.

"It's a matter of scaling expenses. We have the right set up," he said. "We can see growth coming without adding too much in terms of resources. We still need to look into how we can invest in branding."

Lenovo's smartphones, such as LePhones, have gained traction in China with the PC maker ranking second in market share in the second quarter, behind Samsung Electronics, IDC data showed.

The Chinese manufacturer launched smart phones in Russian speaking countries this month, the first time these handsets have been sold in the EMEA region.

"When you look at all the localization and approvals you need to do, you go with the big countries first," said Lanci.

"We are number one in Russia (in PC sales) - we start to see a strong brand, a strong presence and this is important when we look at smart phone launch."

Lenovo sells 15 to 20 different smart phone handsets in China and will select four to five mid to high-end models to sell in Russia.

Lanci said the company would also look to launch smart phones in other emerging markets within EMEA.

"It's not going to be Western Europe - we have a stronger presence in emerging markets than mature markets," he added.

"Western Europe is a market very driven by (telecom) operators - in emerging markets it's open, there is no subsidy. It's a totally different business model."

http://www.reuters.com/article/2012/11/ ... nologyNews

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LENOVO GROUP (00992.HK)'s parent ready for flotation in A-shr mkt in 2014 at the earliest

Liu Chuan Zhi, Chairman of LENOVO GROUP (00992.HK)'s parent company Legend Holdings, said Legend Holdings is ready to launch flotation in A-share market during 2014-16 and will continue to expand investment in a bid to enlarge the scale of the company.

Source: AAStocks Financial News

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Chairman reduces holdings of LENOVO GROUP (00992.HK)

HKEx disclosed that LENOVO GROUP (00992.HK) Chairman & Chief Executive Officer Yang Yuan Qing sold 29 million shares in pit trading on Monday (24 December) at an average price of $7.04, cashing in over $204 million.

After the transaction, the holdings were reduced from 9.32% to 9.04%.

Source: AAStocks Financial News

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HK exceeds LENOVO GROUP (00992.HK) in PC shipment - IDC
2013-01-11

The U.S. market research firm IDC reported that in the fourth quarter of 2012, the global PC shipments fell 6.4% year-on-year to 89.789 million units;

Hewlett-Packard's shipments topped the list by achieving 15.023 million units, followed by LENOVO GROUP (00992.HK), which achieved 14.105 million units.

As to market share, Hewlett-Packard accounted for 16.7%; Lenovo accounted for 15.7%, followed by Dell (10.6%), Acer (7.8%) and Asus (7.4%).

The report said Windows 8, launched at the end of October, made very little impact on the market recovery. For the whole year of 2012, PC shipments fell 3.2%.

Source: AAStocks Financial News