Global PC market to revive Goldman Sachs maintains Lenovo's "buy" rating

"Sohu It News" August 8, the Goldman Sachs Securities Research report noted that Lenovo's first-quarter earnings, gross margin and operating profit margin of 3.46 billion U.S. dollars, 11% and 0.37%, respectively, than the bank's forecast of 3.14 billion U.S. dollars, 10.6% and 0.6%, and the first quarter loss of 0.18 cents per share was also in line with expectations because the tax rate was higher than expected.

Lenovo's orders were maintained at a healthy level in July, especially in the Chinese market, while the mature market grew more than seasonal growth, and China's computer inventories were healthy. However, while computer prices have stabilized, it is believed that the average selling price will continue to fall by 4% to 5% per cent, while the decline in corporate computer demand in mature markets has stabilized, with medium-sized enterprises being better than large enterprises and the US market performing better than the European market.

According to IDC, demand for business computers fell by 1.6% in the first quarter of this year, and when Lenovo's market share rose from 11% to 12.2%, Lenovo lost some of its market share in Europe and Japan. Even though the cost of parts is rising and the price is under pressure, Lenovo still has confidence that the gross profit margin will improve on a quarterly basis, partly because of the reduction in logistics costs and the quarterly increase in operating expenses, but the relative turnover ratio should be reduced. Lenovo also anticipates a slight improvement in operating margins by the quarter, with net profit margins in the second quarter to be balanced and the expected maturity of the market to be balanced at the end of this fiscal year.

Goldman Sachs also noted that management confidence in the turnround is increasing, for example, that the mature market can achieve a balance of payments this year, it is believed to be related to the health of the mainland market demand, can offset the impact of the rise in some parts prices. Goldman Sachs believes that the global PC market has bottomed out, will enter the recovery, in the next 12 months for Lenovo to provide ample operating leverage and support the upward price. The bank considered Lenovo's first-quarter results to be positive and maintained a "buy" investment rating, which would adjust earnings forecasts and target prices.