Sat, Feb 05, 2005 - Page 11 News List

Lenovo says third quarter profit flat, IBM acquisition OK

AFP , Hong Kong

Hong Kong-listed Lenovo Group Ltd (聯想), China's largest personal computer maker, said Friday net profit in its third quarter was virtually flat while the acquisition of IBM's PC business is proceeding according to plan.

The company reported a net profit of HK$327 million (US$42 million) in the three-month period to December after HK$325 million dollars a year earlier.

Sales however fell to HK$6.31 billion from HK$6.55 billion.

For the nine months to December, Lenovo's net profit rose to HK$954 million from HK$865 million while revenues dropped to HK$17.84 billion from HK$18.14 billion a year earlier.

Lenovo said it had a 28 percent share of the computer market as of the end of December.

Lenovo stunned the world in December when it announced the purchase of IBM's global PC operations in a deal worth US$1.75 billion in all.

Upon completion of the deal, IBM will have an 18.9 percent stake in Lenovo and the Chinese company will become the world's third largest computer maker with annual sales of US$12 billion and an 8.0 percent global market share.

However, the Committee on Foreign Investments in the US (CFIUS), an inter-agency panel, is scrutinizing the deal amid fears the technology transfers involved may pose US national security concerns.

Yang Yuangqing (楊元慶), company president and chief executive officer, downplayed concerns by saying the deal is "progressing on-track.

"We have not received any hurdles [from the US] ... we will continue to cooperate with the US," Yang said.

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