Lenovo banks on mainland market to restore profitability

Lenovo Group expressed confidence the domestic market will improve this year but is less upbeat on a revival in western markets in view of the global downturn as the company struggles to return to profitability.

'Consumers in the domestic market have been showing a stronger propensity to buy our products in the first quarter,' said chief executive Yang Yuanqing. 'I'm confident this will lead to a better operating result for us in each coming quarter this year.'

Mr Yang attributed the improved market sentiment to Beijing's proactive monetary and fiscal policies, especially the 4 trillion yuan (HK$4.54 trillion) economic stimulus package announced in November last year.

Government leaders and some analysts are saying the expansionary economic policies are delivering the intended results. They cite rising electricity consumption, stabilisation and even a small rise in commodities and housing prices, and a gain in last month's purchasing managers' index that signals an economic turnaround.

However, the chief executive of the world's fourth-largest personal computer maker is more cautious in his outlook for western markets.

'Some encouraging news about the global economy is popping up here and there, but it's very hard to say the world economy has bottomed out,' Mr Yang said.