Despite a substantial rise in various performance indicators, Lenovo Group has witnessed its stock price plummet by 6% to HKD 11.78, valuing the company at HKD 146.1 billion as of the close on February 20. The mixed market reaction comes after the tech giant reported impressive financial results for the third quarter of the fiscal year 2024/25, which ended on December 31, 2024.
According to the financial report, Lenovo generated a revenue of 135.1 billion yuan, marking a 20% year-over-year increaseNotably, the company's net profit skyrocketed by 106%, reaching 4.98 billion yuanThis financial performance places Lenovo in an advantageous position within the technology sector, while still showcasing the volatility often present in stock markets.
Yang Yuanqing, the chairman and CEO of Lenovo, credited the profitability turnaround in the company’s infrastructure solutions segment for the dramatic increase in both revenues and net profitHe indicated that the segment's shift from loss to profitability played a pivotal role in the positive momentum of overall business performance, signaling a robust recovery strategy.
Lenovo's dominance in the personal computer (PC) sector has been reinforced, as the company achieved a global market share of 24.3%—leading the competition by nearly 5 percentage points over its closest rivalThis lead underlines Lenovo's significant foothold in the increasingly competitive PC market, reinforcing its status as a leading global hardware manufacturer.
The company has also seen continued growth in its mobile phone business, with a 21% year-over-year revenue increaseNotably, Lenovo's market share, both in terms of revenue and shipments, has risen to within the top five in international markets, outside of its key markets in North America and Latin AmericaRevenue growth figures are striking, with China, the Asia-Pacific region, Europe, the Middle East, and Africa showing year-over-year increases of 156%, 155%, and 28%, respectively
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Such explosive growth indicates Lenovo's successful expansion into new geographical markets, showcasing its ambitious strategic plans.
Yang emphasized the necessity of diversifying beyond traditional markets and investing heavily in emerging opportunities across Asia, Europe, and Africa, even if it means a greater financial commitmentHe underscored that sustainable profitability and scaling the business are paramount goals for the company as it navigates through a dynamic global landscape.
One of the noteworthy highlights of the recent fiscal period is Lenovo's Infrastructure Solutions Group (ISG) achieving a remarkable turnaround to profitabilityRevenue in this division surged by nearly 60% to 28.3 billion yuanThe exceptional performance in cloud infrastructure (CSP) business has set new revenue records, while the enterprise segment (E/SMB) exhibited stable growth, leading to improved overall profitability for ISG.
Yang shared insights on the strategic foresight that has characterized Lenovo's approach, noting that the early recognition of the symbiotic relationship between traditional E/SMB services and emerging CSP models was central to the company’s successOver the years, Lenovo has cultivated its CSP division from inception, even to the detriment of short-term profitability, demonstrating a long-term vision for sustainable growthThe success of the ODM+ model stands testament to this focus on scale and operational efficiency.
Lenovo's Solutions and Services Group (SSG) reported record revenues of 16.2 billion yuan in this fiscal season, with a consistent operating profit margin of 20.4%. This success was propelled by an increased emphasis on operational services and project solutions, which now account for nearly 60% of SSG's overall business—a historic highThis shift aligns with global trends where companies are leaning towards service-driven operations as a core component of their strategy.
In an exciting development, Lenovo has announced plans to deploy the DeepSeek large model for AI directly on PCs, making it the global pioneer in local deployment of such technology
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