Lenovo Reports First Quarter 2007/08 Results

Lenovo Group today reported strong results for its first fiscal
quarter of 2007/08, ended June 30, 2007. Consolidated revenue for the
quarter grew 13 percent, year over year, to US$3.9 billion, driven by
robust shipment growth in all geographies. Lenovo's worldwide PC
shipments grew more than 22 percent in the quarter, well ahead of the
industry average growth of approximately 13 percent.

Lenovo's gross profit margin for the first quarter improved to
14.9 percent, compared to 14.3 percent in the same period a year ago,
and down 30 basis points sequentially. Excluding restructuring charges
taken in the first quarter, pre-tax income increased 258 percent to
US$123 million. Net cash reserves as of June 30, 2007 totaled US$1.3
billion.

In April 2007, Lenovo announced an action plan to strengthen its
global competitive position and increase operational efficiency
worldwide. As a result, Lenovo's reported results reflect a
restructuring charge relating to the plan of approximately US$45
million taken in the first fiscal quarter, which ended June 30, 2007.
Reflecting that restructuring charge, Lenovo reported pre-tax income
of US$78 million and basic earnings per share for the first quarter of
2007/08 of 0.78 US cents, or 6.10 HK cents.

"In the past two years, through the formulation of the right
strategy and effective execution, Lenovo's performance is showing
signs of growth," said Lenovo Chairman Yang Yuanqing. "We are seeing
signs from the strategic implementation of our integration plan that
tell us the acquisition is on the path to success. Building upon a
solid, healthy foundation, Lenovo has the ability to grow faster and
tap the growth potential of the PC industry. We will not only improve
the competitiveness of our existing business, but also actively expand
the consumer business worldwide."

"The steps we have taken for enhanced operational efficiency and
expense control positioned Lenovo to take advantage of a rising
worldwide PC market and deliver another solid quarter across all
regions - with each geography contributing to the Company's profitable
growth," said William J. Amelio, president and chief executive
officer. "As Lenovo's market share growth and execution of our core
strategic initiatives continues to drive improved performance, we
remain focused on the fundamentals of a dynamic global market. With
the opening of a new marketing hub in India and new manufacturing/
fulfillment facilities in Mexico, India, China and the U.S., Lenovo
continues to invest in key markets around the world, further improve
our supply chain, and accelerate our ability to reach both existing
and new regions and segments."

GEOGRAPHIC OVERVIEW

-- Lenovo Greater China posted US$1.5 billion in consolidated
revenue in the first fiscal quarter, up 14 percent. The
Company's growth in PC shipments outpaced the industry average
for the Greater China market, driven by growth in both the
Company's transaction and relationship business. Lenovo's
Greater China business accounted for 39 percent of total
revenue in the quarter.

-- The Americas accounted for US$1.1 billion in consolidated
revenue, or 29 percent of total revenue. The rollout of the
transaction business model in the U.S. and Latin America
continued to contribute to Lenovo's growing momentum in the
region, which experienced double-digit volume and revenue
growth year-over-year. Lenovo PC shipments in the Americas
during the quarter increased 15 percent.

-- In the Europe, Middle East and Africa region (EMEA), shipments
increased 22 percent in the first fiscal quarter. For the same
period, consolidated revenue totaled US$755 million, or 19
percent of total revenue. The rollout of the transaction sales
model contributed to revenue gains, with strong sales in
Germany, France and the U.K. contributing to overall
performance.

-- Shipments for the Asia Pacific business (excluding Greater
China) increased 12 percent in the first fiscal quarter.
Consolidated revenue in Asia Pacific totaled US$496 million in
the first quarter, or 13 percent of total revenue. Performance
was driven by expanded transaction business in India and ASEAN
countries and the launch of Lenovo products into select
consumer markets.

PRODUCT OVERVIEW

-- Lenovo's Notebook computers continued to be the largest
contributor to total revenue, driven by sales in China and the
launch of consumer products in Asia. Notebook shipments in the
first fiscal quarter were up 26 percent year over year, and
consolidated revenue was US$2.1 billion, or 53 percent of
total revenue for the quarter.

-- In the first fiscal quarter, Lenovo's Desktop shipments rose
20 percent year over year posting double-digit volume and
revenue gains. Consolidated revenue was US$1.7 billion in the
quarter, or 43 percent of total revenue.

-- Shipments of Lenovo's Mobile Handsets, conducted primarily in
China, increased 2 percent in the first fiscal quarter, with
Lenovo holding the #4 position in that market. Handset
shipments generated consolidated revenue of US$113 million, or
3 percent of total revenue.

ABOUT LENOVO

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 ended June 30, 2007

(in $US millions, except per share data)

Y/Y
Q1 Q1 %
07/08 06/07 CHG
------------------------------------- ---------- ---------- ----------
Turnover $3,926 $3,476 13%
------------------------------------- ---------- ---------- ----------
Gross Profit 585 497 18%
------------------------------------- ---------- ---------- ----------
Gross Profit Margin 14.9% 14.3% 0.6 pts
------------------------------------- ---------- ---------- ----------
Operating Expenses (462) (465) (1%)
------------------------------------- ---------- ---------- ----------
Operating Expense Margin 11.8% 13.4% (1.6 pts)
------------------------------------- ---------- ---------- ----------
Other Income* 0 2 N/A
------------------------------------- ---------- ---------- ----------
Pre-Tax Income before restructuring
cost 123 34 258%
------------------------------------- ---------- ---------- ----------
Restructuring Costs (45) (19) 131%
------------------------------------- ---------- ---------- ----------
Pre-Tax Income 78 15 425%
------------------------------------- ---------- ---------- ----------
Profit Attributable to Shareholders 67 5 1184%
------------------------------------- ---------- ---------- ----------
EPS (US cents)
Basic 0.78 0.06 1200%
Diluted 0.74 0.06 1133%
------------------------------------- ---------- ---------- ----------
EBITDA** 182 81 125%
------------------------------------- ---------- ---------- ----------

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

** Excluding restructuring charges
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