Lenovo's first financial Tipali double still face debt risk

Lenovo Group Ltd. yesterday reported a net gain of $108 million in the first quarter, benefiting from mergers and acquisitions and emerging market performance. Investors still don't face it. Morning Post reporter Zhou Ling Lenovo Group Co., Ltd. (00992.HK, Lenovo Group) released yesterday, benefiting from mergers and acquisitions and emerging market performance pull, the first quarter net profit of 108 million U.S. dollars, compared with the same period last year (hereinafter) growth of 98%, far exceed market expectations.　　But this beautiful performance did not arouse the interest of investors, the same day Lenovo Group fell 6.53%, a large loss of the Hang Seng index.　　Lenovo's shares fell 10.6% per cent in the first half of the year, underperforming the Hang Seng index of 2.8% per cent in the same period.　　Lenovo's board chairman, Liu, complained at yesterday's performance communication in the two quarter, the management, led by Yang, took the risk of "huge debt repayment" and bought nearly 800 million shares of Lenovo Group from Lenovo Holdings, the parent company of Lenovo Group, and became the second largest shareholder of Lenovo Group.　　In June this year, Lenovo chief executive Yang informed HKEx that it had cost HK $3.148 billion and bought 797 million shares in Lenovo, with the shares of Lenovo Group from 0.7% to 8.7%, the largest individual shareholder of Lenovo Group.　　Yang said yesterday that borrowing shares reflected his confidence in Lenovo.　　Mr Yang's confidence, at least from Lenovo's first-quarter earnings report of June 30, was justified: in the quarter, Lenovo overtook Acer as the world's third-largest PC maker (after Hewlett-Packard and Dell), with sales of $5.92 billion trillion, up 15% per cent year-on-year. In the first quarter, Lenovo Group's global PC sales of 5.705 billion U.S. dollars, an increase of 14.9% year-on-year, sales rose 23.1% year-on-year, overall market sales growth of 2.7%.　　Lenovo's share of the global PC market has reached a record high of 12.2% per cent, according to preliminary estimates. "In the second half, Lenovo will continue to expand its share of the corporate PC market, China's 4-6-tier cities and emerging markets," he said.　　Citigroup analyst Chen thought.　　JPMorgan expects Lenovo to climb to the world's second-largest PC maker by the end of the year.　　However, Lenovo warns that the global economic recovery is at an uncertain pace and that the challenges of tablet computers streaming into entry-level PCs remain. Lenovo Group launched its first Tablet PC pad in China in March 2011, with Lenovo saying "the initial market response is ideal", with sales of 80,000 units in the quarter. Although upfront sales were not optimistic, Yang said at a performance communication meeting yesterday that "we are going to get market share of 20% Tablet PCs in China before the end of the fiscal year."　　"Last month, Lenovo Group released three tablet computers to be sold globally to try to get out of the Chinese market." As of June 30, Lenovo Group's net cash reserves of 3.6 billion U.S. dollars. Lenovo said yesterday that it would continue toLooking for acquisitions in the PC industry. In the first quarter, Lenovo completed a joint venture with NEC, an estimate that it would become Japan's largest PC company. This month, Lenovo completed a deal to buy German PC maker Medion AG.