Lenovo's China profits to fund expansion abroad

Chinese electronics giant Lenovo Group (0992.HKG, LHL.FRA, LHL1.FRA) is on the cusp of recording its first profit for domestic smartphone sales, which will allow the firm to increase margins while financing growth in emerging markets, Bloomberg reported, citing the company’s CEO Yang Yuanging. “We will improve our profit not just in absolute dollars, but the pretax income ration as well,” Yang said in a January 4 interview. Lenovo can increase its gross margins by 1% within three years, to more than 3% from the 2.4% reported in the third quarter last year, according to Yang. Lenovo started selling handsets in the Russian, Indian, Indonesian, Vietnamese and Philippine markets in the past half year. In the next year, the firm’s shares are forecast to increase to HK$7.76 from Friday’s closing price of HK$7.50, according to the average of 27 analysts’ projections collected by Bloomberg.