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SCMP Reporter

Lenovo Group treated investors to a long, silent pause yesterday after trading of its shares was suspended amid intense speculation of an imminent corporate revamp to boost flagging sales.
The world's fourth-largest personal computer supplier said the suspension was made pending the release of price-sensitive information. Its Hong Kong-based spokesman declined to comment.
The market has been rife with talk that the major restructuring would include lay-offs at its headquarters in Beijing and a  shake-up of its top management.
'Who goes will not matter as much as what will be the impact of a major restructuring,' said analyst Charles Guo of JP Morgan. 'Investors want to see the company seriously thinking about how to thrive in this bad economy. They want to hear a rational explanation of its direction.'
Lenovo  in November reported a worse than expected US$23.44 million in net income for its financial second quarter to September, down 77.7 per cent from US$105.26 million a year earlier.
Research firm International Data Corp estimated Lenovo lost ground to rivals led by Dell and Acer in the quarter, when it shipped 5.95 million units. That amounted to a 7.4 per cent global market share, down from 8 per cent a year ago.
The company, which acquired International Business Machines Corp's personal computer business in 2005, blamed the loss on weak demand in its commercial and public sector market segments, aggressive pricing from competitors, and slower growth in its core mainland market.
Chief executive William Amelio said Lenovo was drawing up a restructuring programme over the next several quarters that could cost from US$75 million to US$100 million.
'But will that be enough?' asked Mr Guo, noting that there remained questions on how far Lenovo has integrated IBM's personal computer business.
In 2007, chairman Yang Yuanqing attributed 70 per cent of Lenovo's success in integrating the acquired IBM business to  good management and 30 per cent  to luck.
Mr Guo, who had  forecast that Lenovo  would post year-on-year declines in profit for three to four more quarters, said the firm's decision  to keep running its factories on the mainland and build new ones overseas might end up being a drag on earnings, especially if the downturn  was prolonged.
'Even its rival Acer, which replaced it as the world's No3 PC vendor, has focused on outsourcing production to contract manufacturers.'



Lenovo trading halted amid talk of revamp