The Avanti Group Comment On Lenovo Profits

By Author: Akemi Avanti
Total Articles: 19
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The Avanti Group the equities research house based in Tokyo, providing professional trading and investment research solutions to institutional and private investors across the globe have recently drawn their investor’s attention to figures released this week for the world’s largest manufacturer of personal computers, Lenovo Group Ltd as they show an incredible upswing with Net income for the company rising 23% for the first quarter this year.

The increase comes as Lenovo expands its already large presence within the tablet and smart phone markets. The company reported net income of $173.9 million for the quarter, up from $141.4 million for the same time last year has seen its attention focusing away from its traditional line and towards hand held devices. The market for tablet and smart phones is rapidly growing for the company especially in Asia, where smart phone sales have doubled in the last year as demand for personal computers slowed.

“It would be difficult not to appreciate Lenovo’s foresight in this instance as their figures demonstrate. This is a great example of a company changing with the times ...
... to meet the needs of a diversifying market, in this case, when you are the largest PC manufacturer in the world and the market begins to slow. They have shown that they can change direction, not just quickly, but smartly as well and the market has rewarded them for this with continuing product purchasing,” said Andrew Taylor Senior Vice President of Mergers and Acquisitions at The Avanti Group.

Lenovo’s main rival in personal computer manufacturing HP saw the margin between the two companies narrow as Lenovo’s PC sales declined 0.6% to give it a market share of 16.7 percent over HP’s 16.3 percent. The primary advantages the company has over its rival HP are that sales of its tablets have increased 400 percent, bringing its ranking to fourth place with 3.3 percent of the market. While at the same time increasing its sales of its smart phone line, primarily the K900 the company’s flagship, to 11.4 million units or 4.7 percent of the market. These advances come as the PC market saw sales decline for five consecutive quarters, which has increasingly left other manufacturers feeling pressured, while Lenovo has thrived to the point that the company has begun to discuss possible mergers and acquisitions.

“The PC market has seen a number of companies start to struggle as consumer demand diminishes and they miss the boat in the production of new innovative merchandise to fill the gap in the market, Lenovo has kept its finger on the pulse and has positively flourished. Their sales are up, income is up and their market share is gaining daily, these are all good indicators of a company’s health and as such are now getting the attention of investors. Between these indicators and talk of upcoming acquisitions by the company, Lenovo is of great attraction to investors, we will of course continue to monitor their progress from the standpoint of investment,” concluded Andrew Taylor Senior Vice President of Mergers and Acquisitions at The Avanti Group.

The Avanti Group is an equity research house providing research and analysis outsourcing solutions for institutional financial traders worldwide, founded in early 2003.