Lenovo Chairman Resigns

Nov. 3, 2011
Q3 profit up 88%

The founder of Chinese computer giant Lenovo Group has stepped down as chairman, the company said as it reported a nearly 88% year-on-year surge in third-quarter net profit.

Liu Chuanzhi, the 67-year-old founder of the world's second largest computer maker, has resigned as chairman to focus on work in the firm's parent Legend Holdings, the company told the Hong Kong Stock Exchange on Nov. 2. Yang Yuanqing, who is currently chief executive of Beijing-based Lenovo, will also take over as chairman.

Lenovo said its net profit jumped 87.9% year-on-year in the July-September period on strong sales growth in China and other emerging markets.

The company recorded a net profit of 143.9 million yuan (US$22.8 million), compared with 76.59 million yuan a year earlier. Sales grew 35.2% on year to 7.8 billion yuan in the quarter.

Liu, a respected computer scientist who originally worked at the government's Chinese Academy of Sciences, set up Lenovo in 1984 and built it into one of China's best-known brands in the following decades. He will remain chairman of the parent company and become honorary chairman and senior adviser of Lenovo. Liu hopes to guide Legend Holdings to a public stock listing between 2014 and 2016, the firm said.

Liu previously retired as chairman in 2005, after the company completed the landmark acquisition of the laptop computer division of IBM as part of an ambitious global expansion. He was also replaced by Yang then. But he made a comeback in February 2009, replacing Yang, to help turn the company around after the global financial crisis.

Analysts said his departure will have little impact on the company's overall strategy and development.

"Yang has been chief executive for many years," said Vincent Chen, a Hong Kong-based analyst at Yuanta Securities. "The company has set the broad framework for development, with China as the foundation, expansion in other emerging markets as well as mergers and acquisitions in mature markets," he said.

The firm took second place in terms of global sales in the second quarter this year, unseating Dell, while Hewlett-Packard remained number one, according to technology research company Gartner.

Lenovo said it "remains optimistic" that growth will continue, despite uncertainties in the global economic recovery, the debt crisis in Europe and possible weaker demand for personal computers as people turn to tablets.

The company has stepped up efforts to push into overseas markets. This year, it acquired German electronics group Medion AG and unveiled a joint venture with Japanese electronics company NEC Corp.

Lenovo holds a more than 30% share of the personal computer market in China.

Copyright Agence France-Presse, 2011

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