May 24 in Hong Kong,
The tall Yang Yuanqing, whose hair turned white again, said he didn't have time to pay attention to hair and haircuts, but said the biggest change of the year had been
His signature smile hung on his face and he reached out to shake hands with the reporters one by one.
In the face of recent Lenovo storm and the earnings report released today, it is said that
When the narwhal asks
Mobile phone business is the most frequently asked by Yang Yuanqing, and turning losses into profits is for mobile phone business.
However, he also said, but the mobile phone business is far from being abandoned, and it is also an important part of strategy.
The report showed that Lenovo's global smartphone sales fell 7% compared with the last fiscal year, and business revenue fell 6%, with a pre tax loss of $463 million, compared with $566 million in the last fiscal year.
In May 24th, Lenovo's earnings report showed revenue and profit and loss of mobile phones in China, North America, Asia Pacific and Europe. Cartography: Gao Jun
Lenovo took the road of mobile business expansion in 2014 when Lenovo bought MOTO mobile smart phone business from Google for about $2 billion 900 million. At that time Lenovo hoped that with this acquisition, we could squeeze into the European and American markets and complete the localization and globalization.
However, the acquisition of MOTO did not bring good luck to Lenovo. The addition of MOTO brand has made the lenovo mobile phone brand reach five or six in a certain period, and has not attracted more attention from the market. What is even worse is that after 2014, China Telecom operators' policy adjustments no longer provide substantial subsidies, and Lenovo is forced to take part in open channel competition.
Pandora's box is open at this point. Lenovo is dismantled, merged and reorganized on the mobile phone business under the flag, and in order to ensure the performance of the standard, the person in charge of the business is frequently replaced, and finally failed to kill a good card. Gartner data show that its global market output is 9.2% compared with the same period last year, and has been declining for two consecutive years.
But three years of global expansion is over. According to today's fiscal results report for the fiscal year of 17 / 18, Lenovo generally mentions markets other than the Americas.
From the earnings report, Lenovo Mobile Business in the core market of the Americas still maintained rapid growth. Sales volume in Latin America increased by 40% compared with the same period last year, while profitability improved. However, China, Europe, the Middle East and the Asia Pacific region all suffered losses.
Yang Yuanqing said that the mobile phone business is indeed losing money, and investors want us to stop the loss. However, the North American and Latin American markets grew by 40% last year. China is beginning to enter a rising channel. The Chinese market is the only mobile phone market in the global market, and can still struggle in the way of loss. China is too important and the market is too big. China will continue to invest in spite of its losses.
According to his introduction , we do not allow this to be done elsewhere , that is to make money , we do it , not to make money , we shrink first , but China is not .
In May 24th, Lenovo released its report that the performance of China's smartphone market began to decline in the current financial year, and competition continued to be fierce. The group has significantly reduced the size of China's smartphone business to increase its flexibility. In the future, it will take strategic measures to seize local market opportunities. Therefore, even though its sales and revenues have declined year by year, the losses have narrowed considerably.
Do not care when to return to Hongkong, Hang Seng Index to consider A shares and split business
He further explained that for a company, the most important thing is to have a clear direction and strategy, do the business well, and then be very firm in execution, and these two will be able to perform the performance.
In May 4th, the Hang Seng Indexes Company Limited in Hongkong announced that, since June 4th, Lenovo will be removed from the 50 stocks of the Hang Seng Index and replaced by the stone group. This is the second time the Lenovo Group was eliminated by the Hang Seng Index, which entered the Hongkong Hang Seng Index in 2000, but was first eliminated in 6 years until it was rejoined in March 2013.
Lenovo has been cut off by Hang Seng Index for some time before its stock price continues to slump. Shortly after 2018, Lenovo's share price fell to a decline from around 4.7 Hong Kong dollars at the end of the month, closing in May 24th, and Lenovo shares closed at about 3.91 Hong Kong dollars, down by about 20%.
At the same time, facing the technology of Unicorn and asking whether to consider the return of A shares, Lenovo Group CFO Huang Weiming said that if we had the chance, we would also like to return to A shares. In this regard, Yang Yuanqing also expressed approval.
In this regard, Yang Yuanqing said, of course, considering, and not only innovative business, as long as any business can maximize its value, we will consider it.
The loss of Lenovo? American tax reform
In May 24th, Lenovo released its 2017/2018 financial results for the year ended March 31, 2018. Lenovo's total revenue in the fiscal year was $45 billion 350 million, an increase of 5% over the same period last year. The company's equity holders should earn a profit of 189 million US dollars (about 1 billion 200 million yuan).
However, Yang Yuanqing, chairman and CEO of Lenovo Group, said losses were mainly caused by the US tax cuts and Employment Act. The tax reduction and employment bill issued by the US government in the three quarter of last year, the American enterprise tax rate decreased from the year since December 31, 2017, causing 400 million dollar deferred income tax assets to be left out.
According to media reports, the US tax and employment act last year has led to damage to many large companies, including Microsoft, Goldman Sachs, Citibank and so on. Microsoft reported that under the influence of tax reform, Microsoft lost a net profit of 6 billion 302 million US dollars.
What about real profits, with Lenovo's total revenue up 5 per cent from a year earlier? The results show that
Lenovo's business is mainly composed of three parts: personal computer and intelligent device business, data center business and mobile business.
Its personal computer and intelligent equipment business continued to grow, with annual revenue of $32 billion 380 million, an increase of 8% over the previous year, accounting for about 71.4% of revenue. Lenovo's mobile business continued to languish, with a total revenue of $7 billion 240 million a year, down 6% from the same period last year.
In terms of shipments, Lenovo's global smartphone sales fell 7% in the fiscal year. Lenovo's explanation is that Lenovo has continued to improve its product and channel strategy as the Chinese market begins to decline and its manufacturers have a large number of manufacturers.
According to the report, Lenovo's global smartphone pre tax operating loss was $463 million, which improved compared with $566 million in the previous fiscal year.