Lenovo Group (0992.HK) Plans on Entering the Foreign Market after Strong Smartphone Sales in the Country of China

The Chinese Lenovo Group (0992.HK) recently reported its first fiscal quarter’s results. The company’s profits surpassed the analysts’ estimates. This increase in the profits of the company resulted due to an increase in the sales of its smartphones business. The biggest personal computer manufacturer in the world is now shifting its operations towards the smartphone industry.

Lenovo Group (0992.HK), which is based in Beijing, on August 13, said that the company’s net income rose to $214 million in a matter of three months. Thomson was estimating the net income to reach $202 million but the company greatly surpassed the estimates.

This year, the company plans to focus more on the smartphone industry; and for this purpose, Lenovo Group (0992.HK) has made a deal with IBM to buy its server units and Motorola to buy its handset iconic brand. According to the sources, the total price of the deal is around $5 billion. The chief executive of the company, Yang Yuanqing, said that the company has a great potential in the smartphone sector of the industry. He further commented that the company plans on entering foreign markets as well; however, it will not do so at the expense of its margins.

Lenovo Group (0992.HK) announced that there had been an increase of 39 percent in the sales of its handsets all around the globe. According to a report by IDC, Lenovo Group (0992.HK), after beating Samsung Electronics Corporation in the country of China has no doubt become the biggest and the largest smart phone seller in the home region.

However, in its home country, the company faced tough competition with Xiaomi, an upstart based in Beijing that has been seizing the smartphone market share at the expense of very thin margins.

The CEO of the company, on August 13, 2014, said that it would focus more on the foreign operations rather than worrying about the unidentified competitors in its home country.

The CEO of Lenovo Group (0992.HK) further said that there are a number of local companies in the market whose only purpose is to attract investment. Yang said that Lenovo Group (0992.HK) does not operate that way; it balances the profits with growth.

Yang said that China is important for Lenovo Group (0992.HK) but the company also has a number of opportunities in the foreign market. He further cited the growth rates of 500 percent and 300 percent in the region of Eastern Europe and Southeastern Asia.

Coming to the total revenues of the company, Lenovo Group (0992.HK) saw an increase of 18 percent in its revenues and the figures reached to $10.4 billion.

Lenovo Group (0992.HK), on the last trade day, August 14, 2014, saw a decrease of 0.92 percent in its stock prices; the company closed the shares at a price of $29.13. As far as its intraday range is concerned, the numbers are reported to be around $29 to $29.15. The company’s EPS (earnings per share) are quite strong right now, with figures currently at $1.55.

Analysts are of the view that the company will report even better numbers in the upcoming quarters due to its firm sales in the smartphone segment.