It's Too Early to Tell if Lenovo Can Reverse Lagging Growth
HONG KONG -- Lenovo Group may be China's top personal-computer company, but it has also been the worst performer in the Hang Seng Index in Hong Kong. Analysts don't believe that is likely to change soon.
Started in China in 1984 as a distributor for brands like International Business Machines and Hewlett-Packard, Lenovo began making its own line of personal computers in 1990 and became the best-selling brand in China in 1997. During recent years, increased competition and corporate oversight has slowed earnings growth, resulting in investors shunning its shares.
It also fell short of its internal forecast of yearly double-digit growth in both revenue and net profit each year.
Lenovo's shares have lost 38% since the beginning of the year, compared with an 0.8% drop on the benchmark Hang Seng Index. On Friday, Lenovo shares fell 3.5% to 2.05 Hong Kong dollars (26 U.S. cents) as the Hang Seng dropped 0.1% to 12478.
"In the past, Lenovo's share price reflected investors' anxiety over whether Lenovo can develop new horizons, be it going international or diversifying," Lenovo Chairman Liu Chuanzhi said recently, adding, "But lately, investors are questioning more whether we can maintain our leading position."
Mr. Liu acknowledged the company had overlooked market developments in China's rapidly expanding PC market over the past several years. These included changes to the buying habits of its customers. In the past, the main sources of Lenovo's business were state enterprises, which placed large bulk orders. Many of these firms since then have been broken down into smaller enterprises, whose buying patterns were less predictable.
As a result, Mr. Liu said, Lenovo's core PC business "came under attack" from competitors at a time when the company was developing its non-PC business.
Even so, Lenovo is still Asia's biggest PC maker. According to International Data Corp., it held a 12.1% share of the market in Asia, excluding Japan, in the quarter ended June, up from 10.7% in the first quarter. China accounts for more than 90% of Lenovo's revenues.
Despite its top ranking in volume terms, Lenovo's sales growth is lagging behind those of crucial rivals. In the second quarter, its sales grew 14%, far lower than the 36% growth of Hewlett-Packard and Dell's 39%.
Awakening to those challenges, Lenovo earlier this year initiated a restructuring program to realign its focus on its core business selling computers and information-technology-related products such as handsets, notebook computers and servers. It also rejigged its sales and marketing channels, splitting into smaller, more focused teams to enable closer contact with customers.
It has also has been divesting noncore interests, transferring its nontelecom IT services in Chinese software firm AsiaInfo Holdings in July and selling a sizable stake in its motherboard contract-manufacturing operations as early as last year.
IDC Senior Manager Bryan Ma said Lenovo's restructuring efforts to "fortify its position" will help it maintain its peak position in China, where it has a 27% share of the PC market.
Still, he added, the company will have to work to retain that share. "The challenge is that multinational and local PC vendors are going to continue to put heat on them," Mr. Ma said.
Other market watchers agree. "We believe the top three multinational players will maintain their growth momentum and gain market share in the region. We expect Lenovo to lose its market share gradually as the competition intensifies," according to Morgan Stanley analysts Viktor Ma and Danita On.
For several years, Lenovo executives spoke in general terms about expanding overseas. The company even changed its name to Lenovo from Legend Group in April after it hit problems registering Legend in some countries.
Now, with its restructuring program under way, Lenovo appears to recognize the need to protect its own turf before turning its sights overseas. While analysts approve of Lenovo's recent shifts, they say it is still too early to take a position in the stock.
"Lenovo is still quite expensive," says Andy Mantel, Managing Director at Pacific Sun Investment Management (HK) Ltd, adding investors are particularly concerned the company may lose market share.
"I'd like to see some commitment to their refocus to their main industry and to see that play out," says Mr. Mantel.
Lenovo's Mr. Liu has said it may take until the end of the year for the restructuring to bear fruit.
Core Pacific Yamaichi analyst Pauline Lau says while the valuation isn't overly demanding, there are few triggers for buying Lenovo's shares now.
Lenovo is trading around 14.2 times prospective earnings, near the average price-to-earnings ratio of hardware companies in the region, according to Merrill Lynch. Its P/E ratio is similar to Chinese firms like Skyworth Digital Holdings, which trades at around 15 times, and TCL International Holdings Ltd., which trades around 16 times prospective earnings, though Taiwanese Acer is trading at a P/E of less than 10.
Of 21 analysts polled by Thomson First Call, 11 rate Lenovo as "sell" or "underperform" and seven analysts has a "neutral" call on the stock. Only three recommend buying the stock.
联想能否转运恐言之尚早
联想集团(LENOVO GROUP)或许的确是中国头号个人电脑公司，但它的股票一直是香港恒生指数成份股中表现最差的一只。分析师认为，这种情况短期内可能不会改变。
成立于1984年的联想集团最早是以分销国际商业机器公司(IBM)和惠普公司(HP)等国际电脑业巨头的产品起家，1990年起它开始生产自有品牌的个人电脑，到1997年时，联想电脑终于成为中国最畅销的电脑品牌。但近年来，由于市场竞争加剧和公司治理力度加大，联想的利润增长步伐放慢，投资者对该股的兴趣也开始降温。
联想历年的收入和利润指标也都没能实现公司自己预测的两位数增幅。
今年初以来，联想的股价已经下跌了38%，而恒生指数的跌幅为0.8%。上周五联想跌3.5%至2.05港元（合26美分），恒生指数跌0.1%至12478点。
联想董事局主席柳传志最近表示，过去，联想的股价走势不理想是因为，投资者对联想在进军国际市场或发展多元化方面能否大踏步推进感到担心，而现在，投资者开始怀疑联想能否维持已有的领先地位。
柳传志承认，过去几年来，联想忽视了中国迅速扩张的个人电脑市场的发展变化，比如消费者购买习惯的变化。过去，联想的主要业务来自国有企业，它们的采购量非常大。但现在许多国有企业都已分化成小公司了，这些小公司的采购模式很难把握。
柳传志说，在此期间，在联想发展非电脑业务的同时，其核心的电脑业务遭到了竞争对手的挤压。
不过，联想目前仍是亚洲最大的个人电脑制造商。据国际数据公司(International Data Corp.)的数字，截至6月底，联想占有亚洲（不含日本）12.1%的个人电脑市场，而一季度末时这个数字是10.7%。联想的业务收入有90%以上来自国内市场。
虽然联想在销量上的排名稳居第一，但其收入增长步伐低于主要竞争对手。二季度联想的收入增幅为14%，远低于惠普公司的36%和戴尔公司(Dell)的39%。
面对各种挑战，联想今年早些时候启动了一项重组计划，重新将发展重点放在核心的电脑销售和IT相关产品（包括手机、笔记本电脑和伺服器等）上面。联想还重新调整了销售和营销渠道，将他们进行细分，以便能更近距离地接触客户。
同时，联想还在剥离非核心业务，7月份，联想以其非电信IT服务业务置换了国内软件企业亚信控股(AsiaInfo Holdings)的部分股份；另外，早在去年的时候，联想就出售了其母板合约生产业务部门很大一部分股份。
国际数据公司高级经理马伯远(Bryan Ma)说，联想为巩固市场地位而采取的重组措施将使其得以维持在中国市场的顶尖位置。目前联想在中国个人电脑市场的占有率是27%。
不过他也指出，联想要保住市场必须采取切实措施。他说，跨国公司和国内的电脑销售商都在继续加大竞争力度。
其他的市场观察人士也同意这一观点。摩根士丹利(Morgan Stanley)分析师Viktor Ma和Danita On表示，他们认为，电脑行业的三大跨国公司将维持他们的增长势头，并扩大在亚洲的市场占有率。预计随著竞争加剧，联想的市场将逐渐萎缩。
几年来，联想管理层曾表示要拓展海外市场。为此，由于在一些国家用Legend的名字注册时遇到一些问题，该公司于是在今年4月份更名为现在的Lenovo。
目前，在实施重组计划的同时，联想似乎意识到了在瞄准海外市场之前有必要先巩固好已有的市场领地。不过，分析师们表示，虽然他们对联想最近作出的转变表示赞同，但现在就介入该股还为时尚早。
Pacific Sun Investment Management (HK) Ltd董事总经理安迪?曼泰尔(Andy Mantel)说，联想的股价目前仍偏贵。他说，投资者非常担心联想的市场占有率会下降。
曼泰尔说，希望联想在重新转向核心业务方面的举动能产生实效。
而柳传志说，联想的重组计划预计要到今年年底才能结出果实。
京华山一(Core Pacific Yamaichi)分析师Pauline Lau说，虽然联想的估价还不算过分昂贵，但能激励人们现在买进该股的因素很少。
据美林公司透露，目前联想股价的预期本益比为14.2倍左右，接近亚洲硬件行业本益比的平均水平。这一水平与创维数码(Skyworth Digital Holdings)、TCL国际(TCL International Holdings Ltd.)的本益比接近，这两家公司的本益比分别为15倍和16倍，但台湾的宏基(Acer)本益比还不到10倍。
接受Thomson First Call调查的21位分析师中，有11人将联想的评级定为卖出或弱于大盘，有7人将其定为中性。只有3人建议买入该股。
