(Yicai Global) May 27 -- Chinese personal computer manufacturer Lenovo Group has exceeded a net profit mark of CNY10 billion (USD1.5 billion) for the first time as the entirety of its increasingly cloud-based major business segments turned a profit for the first time since 2014.

The laptop and data center equipment maker recorded a 72 percent jump in net profit to CNY13 billion in the fiscal year ended March 31, 2022, from a year ago, the Beijing-based company said in its earnings report released yesterday. The sales increase was milder as Lenovo's revenue surged 18 percent to nearly CNY460 billion (USD68.3 billion).

The biggest income source was growing at a steady pace. The Intelligent Devices Group, which includes smart devices and software business, boosted its operating profit by 27 percent to CNY30.4 billion. Revenue rose by 18 percent to nearly CNY400 billion.

The Covid-19 pandemic has been restricting PC demand, hitting China’s corporate PC market harder than the consumer market, Chairman Yang Yuanqing said to Yicai Global. However, corporate demand overseas is rising.

The PC market still has room to grow in the long run even though it has been expanding slower since the first quarter of this year after two-year rapid growth, said Liu Jun, executive vice president. PCs are still at the center of the shift toward more digital and smart products and services as working from home and online learning are becoming more popular, Liu added.

Gains across the board are meaningful for the hardware maker that has been diversifying to offer more cloud-based services. The Infrastructure Solutions Group, one of Lenovo's relatively new main business segments, was particularly successful during the 2021-2022 fiscal year as it turned profitable during the reporting period. The group that offers data center services for manufacturers, healthcare providers, and financial companies, logged CNY43 million (USD6.4 million) in operating profit. Sales climbed by 13 percent to CNY45.8 billion.

"We must seize the opportunity and spare no efforts to boost the firm’s overall development," said Yang. The ISG is becoming a new driving force for Lenovo's business growth together with the Solutions & Services Group, he added. The latter subscription-based service for companies to use data center hardware made CNY7.7 billion (USD1.1 billion) in operating profit, up 40 percent. Revenue climbed by 30 percent to CNY34.9 billion.

The company understands the value of innovation. Lenovo raised its investments in research and development by 43 percent to CNY13 billion and employed nearly 5,000 R&D talents in the past fiscal year.

Lenovo has been resilient in the face of Covid-19 outbreaks, according to Yang. For example, when southern China's Shenzhen had Covid-19 cases in the first quarter, eastern China's Hefei plant boosted its output to ensure timely global delivery. The Hefei factory hired 8,700 new employees in one week this month to hike production, Yang revealed.

Editors: Tang Shihua, Emmi Laine, Xiao Yi