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Lenovo profit beats analysts' estimates on China

(Agencies)
Updated: 2010-02-04 14:23

Lenovo Group Ltd, China's biggest maker of personal computers, reported fiscal third-quarter profit that beat analysts' estimates as the reviving Chinese economy boosted demand for technology products.

Net income was $79.5 million, or 0.79 cent a share, in the three months ended Dec 31, compared with a loss of $96.7 million, or 1.1 cents, a year earlier, the Chinese company said in a statement to the Hong Kong stock exchange today. That compares with the $46 million median estimate of three analysts surveyed by Bloomberg News. Sales rose to $4.78 billion from $3.59 billion.

Lenovo posted the fastest gain in shipments among the world's four biggest PC makers in the quarter after setting up more stores in rural China, where residents get government subsidies for buying computers and electronics. The maker of Thinkpad laptops has more than tripled in Hong Kong trading in the past year as the company countered the slowdown in the US and Europe by focusing on emerging markets.

"In China, the main difference between Lenovo and other global suppliers is the company already has a strong sales network in the smaller cities," Dean Daeyun Lim, who rates Lenovo shares "buy" at Mirae Asset Securities in Hong Kong, said before the announcement. The computer maker's strategy in China has been "more aggressive" than its competitors, he said.

Lenovo shares fell 6 percent to HK$5.34 ($78 cents) in Hong Kong today at the midday break before the earnings announcement, paring the stock's gain this year to 9.9 percent, compared with the 6.7 percent decline in the city's benchmark Hang Seng Index.