The Chinese electronic giants Lenovo met with a concerned global fate plunging down by 128 million USD in current Financial Year. It was the first time 6 years long span of time when it faced losses at such huge level;most probably one of thesole reason being the market slowdown in recent acquisitions, lame sales and restructuring costs of the conglomerate’s Smartphones and PCs.
World’s one of the best PC and electronic devices provider recorded shares all time level in 6 years in Hong-Kong stake market. The company is eyeing on stepping backwards towards China as it has numerous competitors outgrown currently. Also, restrictions on capital flow from the respective country raise high demand for locally listed companies. Hong-Kong attracts giant size companies like it a financial hub, stable legal procedures, numerous investors, and so on but on the contrary, the share market condition is juggled up in comparison to China.
According to Lenovo’s President and Chief Financial Officer (CFO), Wong Wai Ming,We have been looking for ways to raise value for shareholders. Listing in another market is an option and China is a good market.
The conglomerate looked down at the surging revenue by 3% to $44.9 billion. In the second last quarter, it again fell by 19% thus, shifting its focus towards other electronic devices rather than major selling ones. Further, facing a net loss of 128 million USD but it also witnessed a profit of $289 million in a previous year. Further, it also booked a charge of $923 million for costs related to restructuring the businesses and clearing out smartphone inventories. The sole reason in depreciation in profits was entering and acquiring Motorola phone business from Google, and lower-end server arms International Business Machine Corporation.
Lenovo’s Chairman and CEO,Yang Yuanqing, stated that, “Facing the operational issues in the businesses, we have already taken a number of proactive actions, including making critical decisions in organization, leadership, products and channels to get back to growth in mobile, and adopting a new multi-business operating system to unleash the productivity and creativity of each business.At the same time, we will integrate our traditional strength in end-user devices with our new capabilities in cloud and infrastructure to attack the balanced Device + Cloud opportunities.”
The officials also confirmed that they never regretted on acquiring the respective handset. Although the company faced a loss of 85%. Cut in handsets manufactured throughnetwork providers and sluggish demand in emerging markets contributed to Lenovo’s global smartphone shipments falling 32% to 11.5 million in the first trimester of 2016.
Currently, Lenovo’s shipment in a context of PCs dropped by 7% in last quarter in comparison to 9.6% decrease in the overall market. Smartphones being the utmost challenge in the market, one can not overlook unlikely future. Experts are recommending India and Brazil as the best markets for upcoming competitions. Rising share markets might help the Chinese electronic giants to re-conciliate their stake in the home country.