2012年7月24日星期二

China's Lenovo inches closer to a global tech title


Lenovo Team Ltd is on target to overtake Hewlett-Packard Co since the world's biggest Laptop maker by product sales when this year, rendering it the first Chinese firm to seize the best place globally in the technology sector.

The ThinkPad maker's rise highlights the progress of China's technological innovation companies on the world phase recently thanks to a mix of aggressive pricing, abroad acquisitions as well as their profiting from a fast-growing home industry.

Analysts, nonetheless, also warn that Lenovo's speedy gains in market share have come with the expenditure of revenue margins, whilst the company faces slowing expansion inside the market for personal pcs and hard rivals inside the tablet Personal computer place.

"It's only a make a difference of time before Lenovo gets No. 1 and it will not likely be shocking at all if it occurs later on this year," explained Frederick Wong, govt director at Auparavant Richesse Administration (Hong Kong) Ltd, which owns shares in Lenovo.

He extra, even so, that levels of competition inside the tablet sector and a weak Computer market outlook could place stress on Lenovo.

Lenovo, which became the world's No. 2 Computer vendor inside the third quarter of 2011, experienced a 14.9 p.c world-wide industry share within the April-June quarter this 12 months, a mere 0.6 percentage stage absent from HP's fifteen.5 p.c, according to research firm IDC's most recent knowledge. Figures from market tracker Gartner show an excellent narrower gap, with Lenovo just 0.two percentage level from HP.

In one more technology sector, China's Huawei Technologies Co Ltd, the world's No.two maker of telecom devices, had been expected to surpass Sweden's Ericsson in 2011 revenue. But gradual telecom paying, stiff levels of competition during the handset market place and issues in tapping the huge U.S. market place held it back again.

Changing LANES

Lenovo's rise continues to be helped by its purchase of Germany's Medion plus a joint enterprise with Japan's NEC Corp final year, in addition to its acquisition of IBM Corp's Laptop company in 2005.

Investors have rewarded Lenovo for its marketplace share gains, sending its fill up by about sixteen percent this 12 months and outpacing rivals HP, third-ranked Dell Inc and No. 4 Acer Inc, whose stocks have dropped above the identical time period.

Lenovo at present trades at a several of 12.5 times forward earnings, the second-highest amongst the top-five Laptop makers and properly previously mentioned the 4.six moments several for HP, Thomson Reuters Starmine data confirmed.

But profit margins have endured. Lenovo experienced a 1.four % running margin within the most recent quarter, reduced than HP's seven.four p.c and Dell's six.two p.c, the info showed.

"HP, Dell and Acer have switched lanes during the Computer race and passed the baton to Lenovo regarding focusing on sales fairly than margins," stated Dickie Chang, an analyst at IDC in Hong Kong.

An additional chance is slowing growth inside the Laptop industry since the international financial system, including Lenovo's home turf and stronghold China, eases.

China accounts for about 42 percent of Lenovo's total earnings, with all the bulk of that coming from Pc product sales.

Worldwide Computer cargo progress was largely flat during the 2nd quarter, marking the seventh straight quarter of lower 0 to five p.c growth for that business.

"We continue to be positive on Lenovo's market place share enlargement, but the absolute expansion is nevertheless currently being negatively impacted by a slower marketplace," Jefferies explained in the record. Jefferies has an "underperform" ranking on Lenovo having a price tag goal of HK$5.70.

Overall Computer desire could get this calendar year with the kick off of Windows 8, however the catch is always that competitors inside the sector for tablet PCs -- not Lenovo's strongest area -- will warmth up due to the fact the functioning technique is developed to operate on laptops and tablets.

Mizuho analyst Charles Park forecasts the Pc market will increase by just three percent this yr.

Lenovo's tablets, its LePads, may even confront levels of competition from new merchandise, which includes the next versions of Amazon.com Inc's Kindle Fire and Apple Inc's iPad, in addition to Google Inc's Nexus seven and Microsoft Corp's Area.