The Hong Kong-listed consumer devices maker regained vitality after manufacturing resumed.
Lenovo Group (00992:HK) delivered outstanding Q1 growth and a strong performance. The financial results show that Group revenue in the first quarter grew almost 7% year-on-year to USD 13.3 billion and that net profit surged 31% to USD 332 million on the same basis. PCs and Smart Devices and the Data Center Business Group are the two top contributors to the overall company growth. Starting from the beginning of the 20/21 fiscal year, Lenovo's share price rose from HKD 3.98 to HKD 5.2 in less than 6 months, representing an increase of 30.7%. The market capitalization has reached HKD 62 billion by now.
Lenovo Chairman and CEO Yang Yuanqing said that "Lenovo has quickly regained momentum from the impact of the pandemic and is capturing the new opportunities emerging from remote working, education and accelerated digitalization."
Several external factors benefited the Group. Capturing the Cloud infrastructure demand driven by climbing digital consumption caused by pandemic lockdowns, the Cloud Service Provider business resumed over 30% year-on-year hypergrowth. The fastest-growing sectors Intelligence Transformation, which in turn comprises Smart IoT, Smart Infrastructure and Smart Verticals, surprisingly achieved a 38% year-on-year revenue increase, to over USD 1 billion. The expansion came from Smart City solutions in China and Smart Healthcare solutions in North America. Furthermore, Lenovo retained its number one position in the global PC Devices Market (PC and Tablets). Ongoing geographical uncertainties and the COVID-19 pandemic don't seem to have affected Lenovo overall in Q1 20/21. However, the lingering impact of the pandemic still resulted in pretax losses in some IDG groups.
The future development of Lenovo depends on whether its group mission can go smoothly. For instance, the group's ambitions include expansion of the market in North America, in order to continue developing IoT applications and to gain more Cloud service market share.