HONG KONG, Nov 1: China’s largest computer maker Lenovo reported on Tuesday a 13.45 per cent increase in first-half net profit, boosted by the contributions from its recently acquired IBM personal computer unit, but its shares slumped over seven per cent by the market close.

Lenovo, which completed its US$1.75 billion acquisition of IBM’s personal computer (PC) unit in May, reported a net profit of 711 million Hong Kong dollars (91.2 million US) in the six months to September, compared with $627 million a year earlier.

The company said sales jumped to $48.11 billion during the half-year period from $11.53 billion.

Operating profits rose to $1.17 billion from $645 million.

However, dealers said investors were disappointed that the profit in the first half fell near to low end of market expectations.

The stocks closed $0.275 or 7.24 per cent lower to 3.525.

Many investors got disappointed because its profit came at the low end of market expectations, said Wong Chi Man, analyst at China Everbright Securities.

People are still in the dark, if its lower-than-expected profit was due merely to a one-off item or pressures on its profit margin, he added.

In the second quarter, the company’s net profit rose 22 per cent year-on-year to $354 million while turnover soared 404 per cent to 28.5 million dollars.

Lenovo, the world’s third-biggest personal-computer maker, attributed the second-quarter profit increase to the 13 per cent rise in PC shipments after the acquisition of IBM PC unit.

It also said the IBM integration has generated synergy savings of 156 million dollars in the quarter.

“The new Lenovo is already showing signs of achieving its potential, although we have much yet to do, said Mary Ma, the company’s chief financial officer.

“Most importantly, the response of our customers has been very positive as they begin to see evidence of the complementary strengths of the two organisations,” she added.

Lenovo highlighted the strong growth in emerging markets including China and India with revenue and volume in both places outpacing the overall PC industry in which the company competes.

Speaking at a press conference, Chief Executive Stephen Ward said its future focus will continue to remain on emerging markets which he described as “core” and “great potential” to take the business going forward.—AFP