The Lenovo group has in the first quarter of June more than doubled its net profit, moving from $213 million it made from 2020 to a record $466 million in June 2021.
The exponential profit growth may not be unconnected with a spiralling demand by consumers for Personal Computers (PCs).
Lenovo who is the biggest maker of personal computers had confirmed that following the recovery of the commercial market, it has 27 percent annual revenue growth of up to $16.9 billion, a massive one for the China group.
With the COVID-19 pandemic making working from home inevitable, the demand for PCs skyrocketed, causing the shares in the company rising up as high as 9.7 percent, the highest biggest daily percentage gain since march 30th, with the revenue rising from $13.3 billion to $16.9 billion a year before.
Lenovo also posted a 2.8 percent net income margin, its highest in years, while adding that Information technology recovery had fuelled demand and supported the average selling price of its products, with the PC market projected to continue its exponential growth over the next five years.
In the words of Lenovo’s Chief Executive, Yuanqing Yang :
“The accelerated digital and intelligent transformation has created significant market opportunities globally. We will continue to increase R&D investment, aiming to double it over the next three years”.
The net profit and income results were actually the first earnings Lenovo released since its February business group reorganization, although industry analysts are of the opinion that the demand for PC’s due to the Coronavirus pandemic has started to reduce, with computer system components shortage a worldwide concern.
Research firm, Canalys in a report last month inferred that in the second quarter of 2021, shipments of Pc’s around the world spiking up to 13 percent increase to hit about 82.3 million units, with desktop shipments growing for the first time since the fourth quarter of 2019.
Canalys further added that Lenovo taking advantage of the opportunity , extended its industry lead, with it shipping more than 20 million units for the third year in a row, to grab a 24.4 percent market share, as against HP Inc and Dell which had 22.6 percent and 17 percent respectively.