Mar. 28 (NBD) -- Lenovo parent Legend Holdings Corporation ("Legend Holdings") announced the audited annual results for the year ended December 31, 2017, reporting a combined revenue of 316.3 billion yuan (50.4 billion U.S. dollars), representing an increase of 3 percent as compared with the same period of the previous year.

It's noticed that in 2017 Legend Holdings recorded performance growth for the third consecutive year since its listing. The net profit attributable to equity holders of the company stood at 5.048 billion yuan (804.0 million U.S. dollars), up 4 percent year on year.

The company attributes the increase in the net profit attributable to equity holders to three aspects 1) the net profit coming from the financial investments segment recorded a strong growth; 2) the continuous increase in cost of components around the world; 3) the write-off of deferred income tax assets pursuant to the Tax Cuts and Jobs Act as promulgated by the U.S. government on December 22, 2017 posed joint effects on Lenovo.

Zhu Linan, executive director and president of Legend Holdings, said to the media that the company has been preparing the spin-off IPO for its assets since last year. For now, the company has listing plans on both H-share and A-share market, revealed Zhu.

It's noticed that the net profit attributable to equity holders from the strategic investments in 2017 experienced a year-over-year decrease of 26 percent to 2.004 billion yuan (319.2 million U.S. dollars). Among that, the net profit attributable to equity holders from the IT segment swung into the red from 1.335 billion yuan (212.6 million U.S. dollars) in 2016, recording a loss of 246 million yuan (39.2 million U.S. dollars).

Zhu explained that Lenovo is still undergoing business realignment and recovery.

Photo/Shetuwang

Legend Holdings seems to be seeking for new mainstay businesses to offset the influence of the IT segment on its entire performance. Zhu once disclosed his intent in the performance briefing in 2016.

The year 2017 has witnessed changes in the profit contribution layout in the company's strategic investments. The three focused segments of the company's strategic investments, which include financial services, the innovative consumption and services and the agriculture and food continued to record performance growth.

To be specific, revenue from the financial services segment increased by 130% year-on-year to 3.638 million yuan (549.4 million U.S. dollars), with net profit attributable to equity holders of Legend Holdings up by 7 percent.

Zhu said that the company continues to build pillar assets through strategic investments like acquiring a controlling stake in BIL Bank.

According to Zhu, the weight of the IT segment (Lenovo) in the overall asset structure of Legend Holdings will be lower to 25 percent to 30 percent, which is beneficial to the reasonable asset allocation of the company.

The year 2018 marks the three-year anniversary of its listing on the Hong Kong Stock market. It means the company can spin off its assets and get listed on the A-share market starting from June, 2018.

At the performance briefing, Zhu hoped that in the next three years, the value of the company will be enlarged via spin-off listings and in this way the company's cash flow and liquidity will be enhanced.

Zhu said that Zhengqi Financial and Lakala, two subsidiaries from the financial segment of Legend Holdings, are considering going public in Hong Kong and mainland China, respectively. Levima from the new material sector is expected to get listed by 2020, Zhu added.

Email: gaohan@nbd.com.cn