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Bond Market News
Lenovo Planning Pivot Into Services to Boost Customer Base & Margins
September 21, 2021
The world’s largest PC maker Lenovo Group is planning a pivot from hardware to software and services as it looks to grow its customer base and boost margins. Ken Wong, president of Lenovo’s Solutions & Services Group (SSG) explained this in an interview to SCMP last week using an analogy, stating, “I think Lenovo in the past 10, 15 to 20 years, we’ve been providing the best ingredients for you to cook…We gave you the best ingredients with your PC, your server and your phone. But now with SSG, we’re coming in and saying that…we can also help you to cook whatever cuisine you need.” Wong has set an ambitious goal of doubling its customer base if it can successfully compete as an IT solutions provider among giants such as Google and Tencent. The company is also planning a foray into smart cities and smart manufacturing technologies where it will compete with the likes of Huawei and home appliance maker Midea. This comes after the company posted a solid 120% YoY jump in quarterly profits to $466mn with revenues up 27% to $16.9bn. SSG was the fastest growing unit with revenues up 38% YoY to $1.18bn. The unit posted an operating margin of 22% with operating profits up 51% YoY.
Lenovo’s 3.421% 2030s traded steady at 105.58 yielding 2.71%.
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