Lenovo Holdings is a diversified investment holding company rooted in China and looking at the world, with industries covering IT, financial services, innovative consumption and services, agriculture and food, advanced manufacturing and professional services, as well as financial investment. It has a number of listed companies.
The company expects to increase its performance in 2021 compared with the same period last year. The company expects that the net profit attributable to equity holders of the company and its subsidiaries will be no less than RMB 5.5 billion in 2021, an increase of not less than 42% compared with RMB 3.868 billion in the same period in 2020. The expected growth is mainly due to the substantial increase in the performance of Lenovo Group Limited Co., Ltd., a subsidiary of the company, and the large one-time impairment of the company's associate, China car Rental Co., Ltd., in 2020. As a result, the company and its subsidiaries recorded a net loss attributable to equity holders of the company exceeding RMB 1 billion. In 2021, the Company and its subsidiaries recorded a profit of RMB 97 million from the sale of the associated company, China car Rental Co., Ltd.
Lenovo Holdings mainly derives its income from IT. The company mainly carries out IT business through its subsidiary Lenovo Group Limited (00992.HK), and Lenovo Holdings directly and indirectly holds a 33.5% stake in Lenovo Group Limited (00992.HK). As of mid-2021, IT accounted for 92.2% of the company's total revenue. On February 23, 2022, Lenovo Group Limited (00992.HK) announced the results for the third quarter of the fiscal year 2021. In the first nine months of 2022, the company achieved revenue of $54.92 billion, an increase of 22% over the same period last year, and a profit attributable to equity holders of $1.62 billion, an increase of 76% over the same period last year. In addition, the revenue of the third quarter of 2021 exceeded $20 billion for the first time, achieving double-digit growth in commercial and high-end consumption. The smart device business group's revenue grew 16% year-on-year and achieved a record operating profit margin. We believe that Lenovo Group Limited (00992.HK), as the main revenue source of Lenovo Holdings, its year-on-year increase in performance will provide support for the performance growth of the parent company.
Investment suggestion: as a forerunner in China's asset management industry, the company actively seizes the opportunity of high-quality development of China's economy. We expect that the revenue of most of the company's holding companies will grow last year and comply with the tide of the times. The future development potential is full, laying the foundation for the company to move forward steadily. Recommend to buy.