Lenovo’s profit surpasses estimations despite China’s strict lockdowns

Lenovo’s profit surpasses estimations despite China’s strict lockdowns

One of the pioneers in consumer electronics Lenovo Group Limited announced to have reached milestones both in terms of revenue as well as profit. The company’s annual net income topped the USD 2 billion mark while the revenue grew by USD 10 billion, recording a 72% year on year.

All main businesses of Lenovo were found to be profitable for the entire fiscal year, with mobile, solutions, and infrastructure showcasing strong growth momentum in the recent past. This is a 6.8% rise in Lenovo's Q4 revenues, although relatively slowest since the past seven quarters given the drop in demand for computers following the pandemic high.

For those unaware, there was a rush to buy PCs during the COVID-19 pandemic and the subsequent lockdowns, which in turn culminated in record sales as well as profit for Lenovo during the quarter that ended in December.

Sales began to lose momentum as Lenovo's biggest market, China, experiences its worst hit during the Omicron wave, further prompting various cities to shut factories and impose lockdowns. Despite this, Lenovo managed to overcome macro-environmental bottlenecks as well as navigated supply chain issues, geopolitical tensions, pandemic woes, and high inflation.

According to Lenovo, the digital and intelligent transformation trend is expanding and is offering strong growth opportunities for the group. Over 50% of companies are now digitized as a part of their respective corporate strategy, which predominately spiked following the pandemic.

Lenovo believes the hybrid work model is a long-term change that will drive strong demand for data center infrastructure, smart devices, smart collaborations, as well as smart offices. Amidst these trends, the Chinese multinational electronics major has doubled its R&D investments over the past three years, recording a 43% y-o-y increase to USD 2 billion, cited sources close to the company.

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Rashi Thakkar

Rashi Thakkar

Rashi started her journey in content when she was completing her MBA. Since then, she has helped well-known startups and businesses boost their online presence. Currently Rashi pens downs insightful articles for AlpenHornNews and various other websites, covering an array of sectors from finance and business to technology and healthcare.