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Lenovo Q4 Profit Plunges 64%, Misses Forecasts Amid Tariff Blow

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Lenovo, the world’s largest PC maker, reported a 64% year-on-year plunge in fourth-quarter net profit, falling far short of analysts’ estimates and triggering a sharp 5.4% drop in its share price on Thursday.

The company blamed the profit collapse largely on a fair value loss on warrants and the unexpected imposition of 20% tariffs on Chinese imports by U.S. President Donald Trump in March, targeting fentanyl-related goods but affecting broader categories.

“The 20% tariffs announced in March were implemented suddenly and left us no time to prepare. It had a significant impact on our numbers in the last quarter – it’s not a small number,” CEO Yang Yuanqing said during an earnings call.

Key Financial Results (Jan–Mar Quarter):

  • Net Profit:
    $90 million, vs. $225.8 million expected (LSEG consensus)
    ↓ 64% YoY

  • Revenue:
    $15.72 billion,
    ↑ 23% YoY, exceeding analyst forecast of $15.6 billion

Business Unit Highlights:

  • Infrastructure Solutions Group (ISG):
    Revenue ↑ 64% YoY, driven by server demand

  • Solutions and Services Group (SSG):
    Revenue ↑ 22%, reflecting strong enterprise cloud software sales

  • Personal Computing (PC):
    Continued global leadership but margin pressure remains amid tariff uncertainty

Tariff Impact and Strategy:

Yang confirmed that Lenovo may raise product prices if tariffs persist. He emphasized that the company’s 30 manufacturing facilities across more than 10 countries provide flexibility to adjust operations and mitigate future trade risks.

Although many U.S.-China tariffs imposed since April were rolled back, the 20% fentanyl-related levy remains, continuing to strain Chinese tech firms like Lenovo.

Market Reaction:

  • Lenovo stock:
    ↓ 5.4%, vs. Hang Seng index decline of 1.3%

Europe’s Privacy Watchdogs to Discuss DeepSeek Amid Data Privacy Concerns

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European Union data protection authorities are set to discuss concerns surrounding the Chinese artificial intelligence startup DeepSeek during their monthly meeting on Tuesday, according to the meeting agenda. The discussions arise amid growing scrutiny of how DeepSeek handles personal data, especially regarding European users.

DeepSeek made waves globally last month by showcasing its ability to compete with major U.S. tech firms in human-like reasoning technology, while offering services at a significantly lower cost. However, concerns have been raised by several European privacy regulators about whether the company is using personal data from European citizens to train its AI models and if such data could be transferred to China.

The European Data Protection Board (EDPB), based in Brussels, has scheduled a session to address DeepSeek’s activities. During the meeting, national data protection authorities will share information on the actions they’ve taken in response to DeepSeek’s operations. Marie-Laure Denis, president of the French privacy watchdog CNIL, emphasized that the goal of the meeting is to harmonize responses and share insights on how to address privacy risks posed by the company.

The CNIL confirmed that it had reached out to DeepSeek for clarification on how the company’s AI system operates and whether there are any potential privacy risks for users. Ireland’s data protection authority has also sought further information from the Chinese startup. Meanwhile, Italy’s data watchdog has taken more drastic action, ordering DeepSeek to block its chatbot in the country due to non-compliance with privacy concerns over its policy.

Europe has been known for its strong stance on data privacy, with its General Data Protection Regulation (GDPR) considered one of the strictest data protection laws in the world. The scrutiny of DeepSeek highlights the region’s commitment to safeguarding user privacy amid the rapid growth of AI technologies.

Alibaba’s Taobao Launches AI-Powered English Version in Singapore, Topping Apple’s App Store

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Alibaba’s Taobao shopping app has launched its first-ever English version, powered by artificial intelligence, to cater to non-Chinese users in Singapore. This update, introduced on Tuesday, quickly propelled the app to first place in Singapore’s Apple App Store, according to market intelligence firm Sensor Tower. The app had been popular in Singapore even before this, consistently ranking in the top ten shopping apps since mid-August.

The update enhances Taobao’s accessibility by offering AI-powered translations, enabling users to navigate the app and make purchases without manual translation, making shopping more convenient for English-speaking users. Singapore is the first market to receive this update, alongside neighboring Malaysia, reflecting Alibaba’s broader strategy to expand its global reach.

Strong Singapore Demand for English Interface

Alibaba highlighted the demand for an English-language interface among Singaporean users, many of whom are proficient in multiple languages. The new version of the app translates product descriptions and reviews into English and converts prices from yuan to the Singapore dollar, although some issues with currency conversion and literal translations remain.

Despite these imperfections, the app’s features have generated significant buzz on social media. A TikTok video showing how to change the app’s display to English garnered nearly a million views in just one day. Users can now more easily purchase a wide range of products, including electronics, fashion, and home goods, with direct shipping available for a small fee.

Global Expansion Strategy

Taobao and Tmall are Alibaba’s primary sources of revenue, contributing 26.55 billion yuan ($3.65 billion) for the quarter ending June 30, a 6% year-on-year increase. Though traditionally focused on the Chinese market, Alibaba has been steadily expanding its overseas presence, particularly through platforms like Alibaba.com and AliExpress. Singapore, home to a large Chinese diaspora, serves as a cultural testbed for Alibaba’s ambitions to reach global markets.

Chinese companies like Alibaba are increasingly eyeing international expansion, leveraging the entrepreneurial spirit and innovation capabilities developed domestically. Consulting firm Bain & Company noted that Chinese companies have an advantage in going global due to their large ethnic Chinese customer base abroad.

Challenges Ahead

While the English version of Taobao has been well-received, the user experience is not without its challenges. Prices in yuan have not always converted correctly to local currency, and translations can be too literal. However, with ongoing improvements, Alibaba’s Taobao is positioning itself to become a more accessible and convenient platform for international users.