Lenovo Reports Fourth Quarter and Full-Year 2006/07 Results

Lenovo Group today reported results for its fourth fiscal quarter
and full year ended March 31, 2007. Consolidated revenue for the
quarter rose 9 percent year over year to US$3.4 billion, driven by
stronger performance in all geographies and product segments.

During the fourth quarter, Lenovo's worldwide PC shipments grew
more than 17%, well ahead of the industry average of approximately 11
percent. Including the impact of restructuring, Lenovo reported
pre-tax income of US$66 million and basic earnings per share of 0.70
US cents, or 5.46 HK cents. The Company's gross profit margin for the
fourth quarter reached 15.2 percent, a record for a quarter that
reflected the full impact of the acquired business. Net cash reserves
as of March 31, 2007, totaled US$946 million. Lenovo's board of
directors has proposed a final dividend of 2.80 HK cents, or 0.36 US
cents per share.

"It was a solid quarter and strong fiscal year by any number of
measures," said Lenovo's chairman, Yang Yuanqing. "Our performance
confirms we have not only stabilized our business worldwide, but also
that our focus on transactional business and emerging markets is
beginning to reap very positive results. Lenovo posted gains in market
share, revenue and profit in both the notebook and desktop segments as
well as in all of our operating geographies, with the Americas
business returning to profitability."

"We have significantly improved our business performance, and now
we must build on our momentum and strive to grow faster and more
profitably than the industry by providing the best-engineered PCs
available on the market today," said William J. Amelio, president and
chief executive officer. "Our recently implemented strategic measures
- to implement a transaction model globally, improve our supply chain
efficiency, enhance our desktop competitiveness, and build the Lenovo
brand - will move us swiftly toward closing the efficiency gap between
Lenovo and our competitors. We will continue to combine cost
competitiveness and efficient delivery capabilities with innovative
products to drive increased market share."

GEOGRAPHIC OVERVIEW

-- Lenovo Greater China posted US$1.2 billion in consolidated
revenue in the fourth fiscal quarter, up 13 percent, as the
Company's growth in PC shipments outpaced the industry average
for the Greater China market. Lenovo's performance in China
was boosted by improved operational efficiency, a more
flexible product mix and the development of additional
value-added reseller partners to improve the coverage of
certain vertical markets. The company's Greater China business
accounted for 36 percent of total revenue in the quarter.

-- The Americas accounted for US$997 million in consolidated
revenue, or 29 percent of total revenue, driven by the
completion of the transition of all sales coverage, along with
initial signs of success from the roll-out of the transaction
model into the U.S. Lenovo PC shipments in the Americas during
the quarter increased 9 percent.

-- In the Europe, Middle East and Africa region (EMEA), shipments
increased 14% percent in the fourth fiscal quarter. For the
same period, consolidated revenue totaled US$731 million, or
21 percent of total revenue. Market demand in EMEA was driven
primarily by strong performance in countries where Lenovo has
rolled out its transaction model, supported by the growth in
the consumer and small business segments, as well as emerging
markets throughout the region.

-- Shipments for the Asia Pacific business (excluding Greater
China) increased 18 percent in the fourth fiscal quarter.
Consolidated revenue in Asia Pacific totaled US$473 million in
the fourth quarter, or 14 percent of total revenue.
Performance was driven by expanded transactional business and
the launch of Lenovo consumer products into the geography.

PRODUCT OVERVIEW

-- Lenovo's Notebook computers continued to be the largest
contributor to total revenue. Notebook shipments in the fourth
fiscal quarter were up 29 percent year over year, and
consolidated revenue was US$1.9 billion, or 55 percent of
total revenue for the quarter.

-- In the fourth fiscal quarter, Lenovo's Desktop shipments rose
11 percent year over year. Consolidated revenue was US$1.4
billion in the quarter, or 41 percent of total revenue.

-- Shipments of Lenovo's Mobile Handset business, conducted
primarily in China, increased 12 percent in the fourth fiscal
quarter, generating consolidated revenue of US$126 million, or
4 percent of total revenue.

FULL YEAR RESULTS

For the 2006/07 fiscal year, consolidated revenue increased 10
percent year over year to US$14.6 billion. Lenovo's PC shipments grew
12 percent year over year, ahead of the industry average of 10
percent. In the same period, pre-tax income (excluding restructuring)
grew 29% to US$200 million. The Company's full-year gross profit
margin reached an annual record 14.0%.

Reflecting the impact of restructuring, Lenovo reported full-year
profit attributable to shareholders of US$161 million and basic
earnings per share for the 2006/07 fiscal year of 1.87 US cents (or
14.61 HK cents) versus 0.25 US cents (or 1.95 HK cents) for the
2005/06 fiscal year.

About Lenovo Group Ltd.

Lenovo (HKSE: 992) (ADR: LNVGY) is dedicated to building the
world's best-engineered personal computers. Lenovo's business model is
built on innovation, operational efficiency and customer satisfaction,
as well as a focus on investment in emerging markets. Formed by Lenovo
Group's acquisition of the former IBM Personal Computing Division, the
company develops, manufactures, and markets reliable, high-quality,
secure, and easy-to-use technology products and services worldwide.
Lenovo has major research centers in Yamato, Japan; Beijing, Shanghai
and Shenzhen, China; and Raleigh, North Carolina. For more
information, see www.lenovo.com.

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LENOVO GROUP
FINANCIAL SUMMARY
For the fiscal quarter and year ended March 31, 2007

(in $US millions, except per share data)

Y/Y Y/Y
Q4 Q4 % FY %
06/07 05/06 CHG 06/07* CHG
------------------------------- ---------------------- ---------------
Turnover $3,416 $3,125 9.3% $14,590 9.9%
------------------------------- ---------------------- ---------------
Gross Profit 518 437 18.5% 2,037 9.6%
------------------------------- ---------------------- ---------------
Operating Expenses (460) (456) (0.9%) (1,838) 1.6%
------------------------------- ---------------------- ---------------
Other (Expense)/Income** (4) (21) 80.9% 1 N/A
------------------------------- ---------------------- ---------------
Pre-Tax Income/(Loss) before
restructuring cost 54 (40) N/A 200 29.0%
------------------------------- ---------------------- ---------------
Net Restructuring Cost
Reversed/(Cost) 12 (70) N/A (12) 82.9%
------------------------------- ---------------------- ---------------
Pre-Tax Income/(Loss) 66 (110) N/A 188 122.0%
------------------------------- ---------------------- ---------------
Profit/(Loss) Attributable to
Shareholders 60 (116) N/A 161 625.5%
------------------------------- ---------------------- ---------------
EPS (US cents)
Basic 0.70 (1.30) N/A 1.87 640.4%
Diluted 0.68 (1.29) N/A 1.84 644.0%
------------------------------- ---------------------- ---------------
Dividend per share
(HK cents) 2.80 2.80 --- 5.20 ---
------------------------------- ---------------------- ---------------
EBITDA 117 32 265.6% 414 8.5%
------------------------------- ---------------------- ---------------

* Included only 11 months of contribution from acquired IBM's personal
computer business in FY2005/06 for comparison.

** Including finance income, finance cost and share of
profits/(losses) of jointly controlled entities and associated
companies.
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