China's Lenovo posts record profit in third-quarter, beating expectations
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FILE PHOTO: The Lenovo logo is seen in this illustration photo January 22, 2018. REUTERS/Thomas White/Illustration
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SHANGHAI (Reuters) - China's Lenovo Group, the world's biggest maker of personal computers, posted record profit and revenue in the third quarter on Wednesday, helped by robust demand from people working from home as COVID-19 restrictions persisted.
Net profit jumped by 53% to a record $395 million in the October-December quarter. That beat an average estimate of $293.7 million from eight analysts, according to Refinitiv data.
Revenue also reached $17.25 billion - its highest ever - in the third quarter of the 2021 financial year, up 22% from the second quarter.
"The pandemic is driving people's new behaviour...We believe even after the pandemic the new normal will continue," said Yang Yuanqing, chairman of Lenovo, in an interview with Reuters on Wednesday after the results announcement.
Pandemic-fuelled buying of laptops and other personal gadgets, as well as televisions, have propped up sales of various electronic companies including rivals such as Samsung Electronics and Panasonic Corp.
The results also come as Lenovo has said it is planning to issue Chinese Depository receipts (CDRs) representing up to 10% of its total stock for listing on the Science and Technology Innovation Board of the Shanghai Stock Exchange, the latest in a line of companies looking for a mainland listing.
"We want to leverage the booming China stock market to fund our growth, with the new IPO it will definitely expand our investor scope," said Yang.
According to research firm Gartner, worldwide shipments of personal computers rose 10.7% in the December quarter.
Lenovo strengthened its lead in PCs with 27.1% of the market, ahead of HP Inc with 19.8% and Dell Technologies with 16.6%, the research showed.
Lenovo also announced Wednesday it is setting up a new Solutions & Services Group to further the company's drive to deliver incremental business across big data digital services and cloud services.
The software and services business, which carries the highest margin profile among all products, represents around 8.1 percent of Lenovo's revenue.
Lenovo share prices rose more than 4% on Wednesday, compared with a 0.2% gain in the benchmark Hang Seng Index. Its shares have more than doubled since its Q2 results.
(Reporting by Pei Li and Brenda Goh; Editing by Jacqueline Wong and Ana Nicolaci da Costa)
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