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| Monday, 7 March 2022, 11:25 HKT/SGT | |
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HONG KONG, Mar 7, 2022 - (ACN Newswire) - Moody's has upgraded the issuer rating and senior unsecured rating of Lenovo Group (00992.HK) to "Baa2" from "Baa3", and has revised the outlook to "stable" from "positive", according to China Securities Journal.
Currently, all three major international credit rating agencies have assigned a more positive investment rating to Lenovo Group. In addition to Moody's, Fitch affirmed Lenovo's rating at "BBB" with a "stable" outlook earlier, and S&P affirmed Lenovo's rating at 'BBB-' with a "positive" outlook in July 2021.
Moody's said, "The rating upgrade reflects Lenovo's improved credit profile in terms of leverage, driven by debt reduction and a higher level of EBITDA. We believe the company will sustain its improved credit profile through maintaining its leading market position in personal computers (PCs), supported by steady global demand for PCs. In addition, we expect the company's continued disciplined financial management will help it to maintain its excellent liquidity and improve debt leverage."
The rating upgrade followed Lenovo's third-quarter earnings announcement for fiscal 2021/22, Securities Daily reported. Lenovo's third-quarter performance improved significantly YoY, with revenue exceeding a historic US$20 billion, up 16% YoY to RMB128.7 billion, and net profit of RMB 4.09 billion, up 62% YoY, also a record high.
According to the data, Lenovo's R&D expenses increased 38% YoY in Q3FY2021/22. The Group will continue to develop core technologies around the "New IT" full-stack architecture of "Client-Edge-Cloud-Network-Intelligence", increase its investment in innovation, strive to double its R&D expenses within three years, and deeply promote service-oriented intelligent transformation. Looking ahead, the company remains focused on its 3S strategy (Smart devices/IoT, Smart Infrastructure, Smart Verticals) seeing continued opportunities for sustainable growth and profitability improvements across all areas of the business, keeping it on track to double net margin within three years (by the end of FY 2023/2024).
In addition, Hang Seng Indexes Co., Ltd. announced last month that Lenovo Group will be included as a constituent stock of the Hang Seng Indexes from March 7 on, becoming one of the "blue chip" companies in the Hang Seng Indexes.
Topic: Press release summary
Sectors: Daily Finance, Daily News
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