In May, Lenovo Group released the 2017 annual report. The annual report shows that in 2017, Lenovo Group achieved revenue of US$45.3 billion for the whole year, hitting a new high in three years. However, Lenovo Group still remained net in 2017 while achieving high revenue. The loss was US$189 million, which represented a loss of US$147 million more than the market expected. Among them, the fourth quarter net profit was US$33 million, which was lower than the market’s forecast of US$113.8 million. In fact, Lenovo’s performance in these years has not been very good. From 2013 The Hang Seng Index was excluded from the Hang Seng Index in March. Lenovo’s share price has fallen by 56%.
Why Lenovo does not increase profits? What are the causes of the stock price collapse? How should Lenovo develop next? With these questions, the reporter of Investor Daily sent an interview syllabus to Lenovo Group and Legend Holdings and repeatedly called for contact. To Ms. Gui, the head of Legend Holdings’s brand division, the other party said that it will be forwarded to Lenovo Group, but as of the press release the reporter has not received a reply.
Trade frictions The main battlefield in North America is weak
The 2017 annual results report released by Lenovo Group shows that although Lenovo achieved revenue growth in 2017, its overall performance is still not optimistic.
In this report, Lenovo’s three main business segments all declined. Among them, the PC business that has been the focus for the first time in four years lost the status of PC global leader for the first time. The highly anticipated smart phone business and the data center company that has been the highlight of business growth have been lost. IT business also showed a significant decline.
In the previous quarterly report of 2017, Lenovo still claimed that its global market share had reached a record high, and further consolidated its position in the market. However, this statement was quickly hit by the international data company IDC. According to 2017 4 The first quarter of 2017 global PC shipments and market share report (predicted) released by IDC on the 11th of the month show that HP has replaced Lenovo's success as a PC's 'one brother'.
Another market research firm, Garter, also believes that the global winter of the PC market is still not over. Garter data shows that the global PC market in the first quarter of 2017, shipments fell 2.4% year-on-year to 6.22 million units, which is also since 2007 Global PC shipments for the first time were below 63 million units for the first time.
The reasons for the decrease in PC shipments may be related to the increase in the prices of raw materials for production PCs. Gartner also pointed out in the report that the PC industry is experiencing price increases. Two years ago, the price increase in the PC industry was mainly due to the devaluation of local currencies against the US dollar. This round of price increase is mainly due to the shortage of spare parts, resulting in price increases.
Lenovo surpassed Hewlett-Packard as the No. 1 PC maker in 2013 and has been consistently occupying the top spot since then. During this fall, IDC analysis stated that Lenovo lost its first place or was related to its setback in North America.
As far as the future does not seem to see signs of obvious improvement, especially from the recent encounters with ZTE in the United States, it can be seen that the days of high-tech companies in the United States are not that good.
The market value shrinks by half
According to an analysis from Bloomberg, since Lenovo reached its peak in 2015, it has now lost two-thirds of its market value, which is why the article calls it the 'world's worst performing technology stock'.
According to the 2017 annual report released by Legend Holdings (Stock Code: 03396.HK), Legend Holdings’ operating revenue for fiscal year 2017 was 316.263 billion yuan, up 3% from the same period of last year; net profit attributable to equity holders of the company was RMB 5.048 billion. , Compared with the same period of last year, it increased by 4%. From the perspective of business contribution, during the reporting period, Lenovo’s operating income mainly comes from the IT industry (ie Lenovo Group), financial services, innovative consumption and services, agriculture and food and new materials. Among them, Lenovo Group's strategic investment accounted for the largest proportion of operating income, which was approximately 299.363 billion yuan, accounting for more than 95% of Legend's total revenue, an increase of 6% over the same period.
However, like Lenovo Group, the high revenue also does not bring high profits to Legend Holdings. The net profit of Lenovo Group, which has the largest share of revenue, and net profit attributable to equity holders of the company are at a loss. The amount reached 670 million yuan and 246 million yuan respectively.
Under this circumstance, the “Investor” reporter found that in Lenovo’s 2017 semi-annual report, Lenovo’s holding of Lenovo Group’s shares was 31.48%. As of the latest annual report, the shareholding ratio has decreased by 2.38% to 29.10%.
In early May, the Hong Kong Hang Seng Index announced a quarterly adjustment and Lenovo Group was removed from the Hong Kong Hang Seng Index. The change took effect on June 4. In response, Lenovo Group Chairman Yang Yuanqing stated at Lenovo’s performance conference: 'That was not my concern. The fact that 'the performance continues to decline, the market value shrinks by half, and the Hang Seng Index has not been removed has caused the CEO's concern. What does he want to care about?
5G or the best opportunity to turn over
Lenovo was born in 1984. It was led by Liu Chuanzhi and led by 10 technical staff of the Institute of Computing Technology of the Chinese Academy of Sciences. From this source, Lenovo has a background in the business unit. Lenovo deserves to be the first batch of technology successfully launched after China’s reform and opening up. One of the companies, who had obtained more than 10 years of PC sales in China and the world's top laurel, shows that its R&D strength still has a certain foundation.
According to the data, Lenovo’s Motorola owns more than 2,000 patents, which is the basis of Lenovo’s mobile technology. In addition, Lenovo has developed 5G technology for more than 10 years.
International data company IDC had previously expected the first commercial 5G handset to be born in the second half of 2019. It also stated that the scale of 5G handsets could quickly reach 212 million by 2020 and then increase to 18% by 2022. The smartphone industry will Ushered in a new round of shuffle integration.
Some analysts believe that Lenovo will be the first wave to launch 5G mobile phones. News shows that Lenovo will get the Qualcomm Snapdragon 855 processor starting right, and may become the first domestic 5G mobile phone manufacturers. So far, domestic The focus for mobile phone manufacturers is who can get the right to use Qualcomm's 5G chips. If Lenovo can catch this 5G train, then it is possible to turn over with 5G. However, even with this possibility, Legend Holdings still chooses to reduce its holdings. Why is this?