Shulou(Shulou.com)06/01 Report--

The Singles' Day holiday just passed is an all-night carnival for hundreds of millions of people, and it is also a grand occasion for many enterprises. Tmall's turnover exceeded 10 billion in 1 minute 36 seconds, and the number was refreshed to 100 billion in 1 hour, 3 minutes and 59 seconds. The server has been maxed out, the business volume of the express delivery industry has increased sharply, and with the support of strong spending power, Singles Day has been creating myths one by one.

In this holiday which belongs exclusively to consumption, many enterprises display their skills and do their best, and PC giant Lenovo is no exception. A number of products are highly sought after, and the sales of the whole network in 4 minutes are over 100 million. This data makes Lenovo an existence that can not be ignored on the Singles Day stage, and it is precisely these data that confirm the competitiveness of Lenovo products in the market.

A few days ago, Lenovo released its second-quarter results, which really show the current situation of Lenovo. Lenovo, founded in 1984, has celebrated its 35th birthday, and Lenovo, which is in its thirties, has already entered middle age. When the midlife crisis has become a social consensus, Lenovo, which stands at the top of the industry, cannot escape this fate. On one side is the revelry and hustle and bustle of Singles' Day, and on the other side is the financial report data and cruel reality that have to be carefully analyzed, associating walking in the poles of ice and fire.

Reduce cost and increase efficiency, beautiful financial results

After the release of Lenovo's financial results for the second quarter of 2020 (from June 1, 2019 to September 30, 2019), Lenovo CE0 Yang Yuanqing said on Weibo: "I am very pleased to see the continued acceleration of our growth momentum in the quarter, which proves that Lenovo's intelligent change strategy is clear and implemented effectively. Especially in the current complex and changeable international economic and trade environment, we have still achieved strong financial performance, demonstrating our commitment to continuous innovation. " Between the words, it is hard to hide his delight. Yang Yuanqing's strength comes from Lenovo's overall positive results in the second quarter.

Data show that Lenovo's total revenue reached 180.1 billion yuan in the first half and 94.8 billion yuan in the second quarter, achieving nine consecutive quarters of year-on-year growth; pre-tax profit was 2.17 billion yuan, up 45% from the same period last year; and net profit was 1.42 billion yuan, up 20% from the same period last year.

While the overall revenue and profits are improving, the various business sections of Lenovo have increased to varying degrees.

PC ranks first in global share, with sales growth of more than 7% year-on-year, a record high; the overall profit margin of the smart device business group exceeded 5% for the first time; and the mobile business continued to make profits for four consecutive quarters, up more than 400 million yuan from the same period last year, the highest level since the acquisition of Motorola Data center business in china grew by 19% year-on-year, and Lenovo has achieved good results this quarter, giving the market a qualified answer, no matter which way it looks at it.

Looking at Lenovo's results in this quarter, we can see that there has been a relatively significant improvement in overall revenue, profits and various business sectors, while the overall improvement in revenue and profit is the result of Lenovo's improvement in quality and efficiency and cost control.

In this quarter, in terms of operating expenses, Lenovo's total operating expenses in the current quarter was 12.2 billion yuan, and the operating expense rate was 0.7 percent lower than that of the previous quarter, down to 12.9 percent. The most direct impact of the reduction in operating and management expenses is the improvement of Lenovo's profit margin and revenue.

Lenovo's results for the quarter are in relatively good shape, whether it's good revenue, a big increase in profits, or a significant increase in specific businesses. Under such data, Lenovo's role seems to be a high-spirited and successful person, which seems to have nothing to do with the "midlife crisis", but when we look away from the financial statements, we will find the reality that Lenovo faces.

The overall results are good, but the stock price is green, and the negative feedback reflects Lenovo's unhealthy business situation.

PC outshines others in business

Data show that in the second quarter, Lenovo's smart device business group (including PC business and mobile business) had overall revenue of 85.5 billion yuan, up 2.8% from a year earlier, with a pre-tax profit of 4.3 billion yuan. Among them, the revenue of the PC business was 74.7 billion yuan, which still achieved 4.1% in the face of global supply shortages and poor macroeconomic conditions, and revenue also accounted for 78% of the total revenue, slightly higher than last quarter. It can be said that it has propped up the whole Lenovo on its own.

The strength of Lenovo's PC business is not only in the overall revenue, but also in the absolute dominance of the market.

Lenovo occupies 40.1% of the market share in the domestic PC market, firmly ranks first, and exceeds the sum of the second to fifth places. Lenovo's excellent performance in the domestic market is enlarged to the international level, and Lenovo is still the industry leader with 24.4% of the global market share.

In addition, the current Windows7 service is about to stop, and the use of Window10 has become a global replacement background of rigid demand, Lenovo's PC business has new opportunities and growth points.

Under the aura of pc, Lenovo's other businesses look bleak. At the same time, a single business accounts for nearly 80% of revenue, which means that the revenue structure is unreasonable, so vigorously developing other businesses and promoting intelligent reform has become the key task of Lenovo.

Intelligence is not improving.

At Lenovo's 2020 fiscal year oath meeting in April this year, in order to adapt to the changes in the market and industry, Lenovo put forward a new vision of "intelligence for every possibility" and officially announced the landing of the company's intelligent transformation strategy. and identified the intelligent Internet of things, intelligent infrastructure and industry intelligence 3s strategy to help the company's intelligent transformation.

"Lenovo is a company that keeps climbing and never stops," Yang Yuanqing said in his speech. every time we reach a peak, we always aim at the next higher peak and start immediately. and the next peak is intelligent change. I firmly believe that as long as we correctly and firmly implement the 3s strategy, we will be able to reach the new peak. " After a period of development, Lenovo's intelligent business results began to show, some of the business has a certain growth, but these for Lenovo's overall revenue has not improved much.

In this quarter, amid the bugle of intelligent reform, Lenovo's data center business revenue was 2.687 billion, down 15% from a year earlier, with a loss of 103 million yuan, accounting for only 10% of total revenue.

Lenovo firmly occupies the top position in the field of personal computers, second to none in the PC market, but in the face of many challenges, the association that regards intelligent change as a breakthrough is still a long way off to achieve the goal of empowering the intelligent era. At the same time, the development of other businesses is difficult to meet expectations, and the huge gap between the core business and other businesses makes Lenovo's business walk between ice and fire.

Mobile services drop again and again

Lenovo, once a leader in the mobile phone industry, has been on the road to no return after the acquisition of Motorola. Today's mobile phone market, Huawei, Xiaomi, vivo, OPPO occupy most of the market, Lenovo does not have much say. Market position is really reflected in the data, mobile business revenue fell 7% year-on-year, accounting for the company's total revenue has dropped from 21.8% to 10.3%.

Although there is a strategy of focusing on profit adjustment, under such a current situation, it can be predicted that Lenovo's mobile business will not improve greatly in a short period of time. The market share of mobile business has declined again and again, and the data center has suffered a large loss. The two account for only 20% of Lenovo business, and the growth rate is not obvious, so it is really difficult for people to be optimistic.

'Lenovo 's new business is' tiny 'compared to its core business, but you have to believe it can grow into a towering tree,' Mr. Yang said. But we all know that not any seed can grow into a towering tree, especially in today's tottering market environment.

The PC business is good enough to support the whole Lenovo, but it is not a rational choice to rely too much on a single business, which faces a certain ceiling. And a single business contribution of nearly 80%, has also become a major constraint to the development of Lenovo.

At the same time, the dividend of the Internet industry has passed, coupled with the impact of mobile phones, the growth of the PC industry has been weak for a long time. Although Yang Yuanqing mentioned that PC will not be replaced, it is also a fact that the market potential is limited. In such a market environment, Lenovo, which is mainly engaged in computer business, is facing great pressure of transformation.

How can the dilemma be broken?

When Lenovo is talking about revenue and profit growth, and then talking about the first global share of the pc business. Lenovo's share price is also falling and its buy rating is being downgraded to neutral by CICC. Lenovo, which seems to be in the limelight, is still facing a grim situation.

Lenovo, once regarded as national pride, is now at a disadvantage in the field of public opinion. The unsatisfactory business, many inappropriate remarks and decisions made by senior executives have greatly reduced Lenovo's reputation and image, and also made Lenovo's battle line with the majority of consumers no longer unified. In many public relations crises, it is not easy for Lenovo to regain its corporate image.

PC market potential is small, new business is difficult to improve, single business structure, poor reputation, many problems are placed in front of Lenovo, threatening the survival of Lenovo.

In the new earnings report, revenue growth of just 1% is not much mentioned, which is still 14% in the same period last year and 5% in the previous quarter, the lowest level since Lenovo in the seventh quarter. The slowing data confirm the grim situation facing Lenovo, and the current glorious results can not hide the fact that Lenovo is moving more and more slowly.

Over the past 35 years, Lenovo has almost witnessed the development and transformation of the entire Internet industry, and has achieved its own achievements from scratch, from small to large. Yang Yuanqing said, "what we write today is a magnificent vision blueprint. Next, we will also map the climbing path to this vision. Step by step, thousands of miles. Let's work hard day after day and keep going."

Along with the trumpet of Lenovo's battle, along with the changes in the industry and the complex market environment, standing on the new starting point of industry reform, for Lenovo, winning battles in internal and external troubles and overcoming the "midlife crisis" is related to whether the enterprise can return to the high point and the future of Lenovo.

(official account of Liu Kuang / tr. by Phil Newell) ID:liukuang110

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