Lenovo Group Ltd.

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Company Background

Lenovo Group of China is the world's largest maker of personal computers. The company has recently been expanding its business in the peripheral fields, such as smartphones, tablet computers and enterprise servers, focusing on its so-called PC Plus strategy to diversify its product portfolio. The company is also stepping up efforts to develop wearable gadgets, aiming to become an all-around manufacturer in the information technology field.

Founded by Liu Chuanzhi and his colleagues, Lenovo began as a PC sales unit in 1984, when Liu was a researcher at the state-run Chinese Academy of Sciences. In the 1990s, the company started selling PCs under its own brand, building up sales by offering prices lower than those of its rivals. By the late 1990s, it had claimed the top share of the domestic PC market.

Lenovo made big strides in the global market after acquiring the PC business of U.S. technology powerhouse IBM in 2005. The company has rapidly expanded its overseas sales, helped by the global popularity of the ThinkPad brand, originally developed by IBM.

Lenovo is also known for aggressively pursuing mergers and acquisitions. In 2011, it merged its PC operations with those of Japanese IT solutions provider NEC, launching a PC joint venture in Japan. In 2014, the Chinese company bought the Motorola's smartphone business from U.S. search giant Google.

Chinese investment company Legend Holdings, which Liu heads, holds slightly more than 30% of Lenovo's outstanding shares. Lenovo is also known for its close ties with the Chinese government, a relationship that has been a source of Internet security concerns in the U.S. and Europe. Ensuring management transparency is seen as a main challenge facing the company as it grows.

Business Summary

Lenovo Group Ltd. is an investment holding company, which engages in the development, manufacture and marketing of technology products and services. It operates through the following segments: Solutions and Services Group, Intelligent Devices Group, and Infrastructure Solutions Group. Its products include personal computers, workstations, servers, storage, smart televisions, and mobile products such as smartphones, tablets, and applications. The company was founded in 1984 and is headquartered in Hong Kong.

Financial Highlights

Mar 2022	HKD	USD
Revenue	557,510.26M	71,618.21M
Gross Profit	86,288.25M	11,084.65M
Operating income	23,820.92M	3,060.05M
Income before tax	21,599.14M	2,774.64M
Net income	15,801.06M	2,029.81M
EBITDA	33,663.33M	4,324.41M
Diluted EPS	1.22	0.15
Dividends Per Share	0.38	0.04
Total Assets	348,579.09M	44,510.44M
Total liabilities	305,737.51M	39,039.95M
Total equity	39,083.69M	4,990.63M
Operating cash flow	32,209.99M	4,137.72M
	Currency in HKD	Currency in USD

Historical Data

HKD | USD

	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Mar 2022
Revenue	354,152.14M	400,244.14M	396,431.01M	470,917.87M	557,510.26M
Gross Profit	44,358.06M	52,695.44M	58,951.95M	69,050.40M	86,288.25M
Operating income	3,184.87M	9,774.36M	11,916.31M	17,712.25M	23,820.92M
Income before tax	1,196.40M	6,718.03M	8,068.73M	14,005.44M	21,599.14M
Net income	-1,478.48M	4,676.57M	5,198.77M	8,804.74M	15,801.06M
EBITDA	8,952.22M	16,037.21M	19,475.56M	25,930.27M	33,663.33M
Diluted EPS	-0.13	0.38	0.42	0.69	1.22
Dividends Per Share	0.26	0.27	0.27	0.30	0.38
Total Assets	223,630.80M	235,408.10M	249,022.20M	295,356.26M	348,579.09M
Total liabilities	195,288.18M	210,653.44M	224,858.29M	266,771.41M	305,737.51M
Total equity	27,615.18M	26,661.98M	24,783.82M	27,669.54M	39,083.69M
Operating cash flow	-6,069.19M	11,343.12M	17,278.07M	28,333.47M	32,209.99M

	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Mar 2022
Revenue	45,349.94M	51,037.94M	50,716.34M	60,742.31M	71,618.21M
Gross Profit	5,680.14M	6,719.56M	7,541.86M	8,906.60M	11,084.65M
Operating income	407.82M	1,246.39M	1,524.48M	2,284.65M	3,060.05M
Income before tax	153.20M	856.66M	1,032.25M	1,806.52M	2,774.64M
Net income	-189.32M	596.34M	665.09M	1,135.69M	2,029.81M
EBITDA	1,146.35M	2,045.01M	2,491.55M	3,344.66M	4,324.41M
Diluted EPS	-0.01	0.04	0.05	0.08	0.15
Dividends Per Share	0.03	0.03	0.03	0.03	0.04
Total Assets	28,494.28M	29,988.48M	32,128.16M	37,990.63M	44,510.44M
Total liabilities	24,882.96M	26,835.00M	29,010.60M	34,313.86M	39,039.95M
Total equity	3,518.63M	3,396.45M	3,197.54M	3,559.03M	4,990.63M
Operating cash flow	-777.17M	1,446.44M	2,210.42M	3,654.65M	4,137.72M

Valuation Measures

Mar 2022
PER	6.27
ROA	4.90%
ROE	47.34%
Operating margin	4.27%
Profit margin	2.83%

Key executives

Chairman & Chief Executive Officer: Yuan Qing Yang
Senior Vice President & Group Operations Officer: Che Min Tu
Chief Financial Officer & Executive Vice President: Wai Ming Wong
Chief Information Officer & Senior Vice President: Arthur Hu
Chief Technology Officer & Senior Vice President: Yong Rui

Shareholders

Legend Holdings Corp. (29.9%)
YANG YUAN QING (6.3%)
Union Star Ltd. (Kayman Islands) (5.9%)
The Vanguard Group, Inc. (1.6%)
BlackRock Fund Advisors (1.4%)
China Asset Management Co., Ltd. (1.0%)
Dimensional Fund Advisors LP (0.9%)
Norges Bank Investment Management (0.8%)
Schroder Investment Management (Singapore) Ltd. (0.8%)
CSOP Asset Management Ltd. (0.7%)

Contact Details

Website:http://www.lenovo.com
Address: Lincoln House, Taikoo Place, 979 King's Road, Hong Kong, Hong Kong
Phone: +852.2590.0228

Related Companies

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Motorola Mobility Comercio de Produtos Eletronicos Ltda.
Lenovo East Europe/Asia LLC
Lenovo (Venezuela) SA
Lenovo PC International Ltd.
Lenovo (Israel) Ltd.
Lenovo (Huiyang) Electronic Industrial Co., Ltd.
Lenovo (Hong Kong) Ltd.
Lenovo Global Technology (Hong Kong) Distribution Ltd.
Lenovo HK Services Ltd.
Lenovo Enterprise Solutions LLC
Beijing Lenovo Software Ltd.
Lenovo (Asia Pacific) Ltd. Sucursal Colombia
Lenovo Philippines, Inc.
Lenovo Global Technology Korea LLC
Lenovo Global Technology (India) Pvt Ltd.
Lenovo Global Technology (Asia Pacific) Ltd.
Lenovo Agencia en Chile
Lenovo Global Technology Germany GmbH
Lenovo Enterprise Technology Co., Ltd.
Lenovo Global Technology UK Ltd.
Motorola Mobility UK Ltd.
Lenovo (Shanghai) Co., Ltd.
Shenzhen Lenovo Overseas Holdings Ltd.
Lenovo Magyarorszag Kft
Leap Wave Ltd.
Lenovo Enterprise Solutions (Singapore) Pte Ltd.
Lenovo Shenzhen Electronics Co., Ltd.
Lenovo Manufacturing Ltd. /Vg/
Motorola Wuhan Mobility Technologies Communication Co., Ltd.

Competitors

HP Inc.
Logitech International S.A.
Super Micro Computer, Inc.
Archos SA
Cisco Systems, Inc.
Hewlett Packard Enterprise Co.
Dawning Information Industry Co., Ltd. Class A
2CRSI SA
Inspur Software Co., Ltd. Class A
PC Connection, Inc.
Insight Enterprises, Inc.
Chenbro Micom Co., Ltd.
Red Cat Holdings Inc
China Techfaith Wireless Communication Technology Ltd. Sponsored ADR
Nutanix, Inc. Class A
Vuzix Corporation
Inseego Corp.
Computer Direct Group Ltd
Formula Systems (1985) Ltd.
Matrix IT Ltd.
One Software Technologies Ltd.
Sichuan Tianyi Comheart Telecom Co., Ltd. Class A
Sunplus Technology Co., Ltd.

Last Updated on 12 Aug, 2022