Reporting one of its best financial performances to date, Lenovo Group warned of headwinds from sudden US tariffs on Chinese goods.
The Beijing-based tech giant Lenovo announced annual revenue of US$69.1 billion for the year ending 31 March, marking a 21 per cent year-on-year (YoY) increase. Net income rose 37 per cent to US$1.4 billion.
According to a report by South China Morning Post, the growth was attributed mainly to its “hybrid AI” strategy, targeting both consumers and enterprises.
However, the upbeat results were clouded by an unexpected tariff hike imposed by the US on 4 March. Lenovo Chairman and CEO Yang Yuanqing said the company was caught off guard by the abrupt move. Yang noted that there was no time to prepare, citing a significant impact on quarterly performance.
The 20 per cent tariffs were not part of the recently agreed 90-day suspension between the US and China, intensifying investor concerns. Lenovo’s Hong Kong-listed shares fell 5.4 per cent to HK$9.57 following the announcement.
Despite the challenges, Yang expressed confidence in Lenovo’s global supply chain. With manufacturing facilities in over 10 countries, he said the company could adapt its production to minimise tariff exposure. He added that the company was less concerned about tariffs themselves and more about the unpredictability and rapid changes in the trade environment.
Lenovo highlighted strong growth in its Intelligent Devices Group, which saw a 13 per cent year-on-year revenue increase to US$50.5 billion. The group includes Lenovo’s PC and smartphone businesses. AI-powered PCs exceeded sales expectations in their first year.
Luca Rossi, president of the Intelligent Devices Group, said AI PCs could make up 80 per cent of the global market by 2028.
The Infrastructure Solutions Group also posted a record US$15 billion in revenue, up 63 per cent, fuelled by demand for AI servers and infrastructure.
Yang reaffirmed China’s irreplaceable role in global supply chains due to its efficiency and cost advantages.
