(Yicai Global) Aug. 12 -- Lenovo Group posted a 11 percent surge in net profit in the first fiscal quarter from the same period last year, despite slowing sales of its main product, personal computers, as the Chinese tech giant’s new business segments drive growth.

Lenovo raked in CNY3.4 billion (USD516 million) in profit in the three months ended June 30, China’s biggest PC maker said yesterday. Revenue nudged up 0.2 percent to CNY112 billion (USD17 billion). This is the nineth straight quarter that both profit and revenue have expanded.

“Lenovo has achieved growth for nine consecutive quarters, despite facing multiple challenges such as inflation in overseas markets, variations in foreign currency exchange rates as well as supply-side changes,” said Chairman Yang Yuanqing.

“Sales of personal computers, which are the company’s core business, slumped by over 10 percent in the first fiscal quarter due to these obstacles. But Lenovo still performed better than its rivals. The relatively small decline meant that Lenovo was able to gain market share. The firm’s PCs are also becoming more high-end, which increases the average selling price,” Yang said.

Lenovo’s sales of personal computers tumbled 12.1 percent in the year’s second quarter to 17.5 million units, according to US market research firm IDC. Yet its share of the PC market climbed to 24.6 percent from 23.7 percent a year earlier. And it still performed slightly better than worldwide PC sales which sank 15.3 percent to 71.3 million units.

Although the PC market is facing short-term challenges, computers are still regarded as key and irreplaceable tools of productivity, and so Lenovo is fully confident about the market in the long term, the Beijing-based company said.

Lenovo's other business segments did well. The infrastructure solutions group logged record quarterly revenue of CNY13.8 billion (USD2 billion), soaring 14 percent year-on-year and turning a profit for the third straight quarter. Its intelligent devices group, which includes smart devices and software, brought in CNY94.2 billion (USD14 billion) even though revenue dipped 2.7 percent.

Lenovo has no plans to manufacture cars, Yang added.

Lenovo’s share price [HKG:0992] was trading down 0.28 percent as of 1.30 p.m. China time today at HKD7.11 (USD0.91).

Editor: Kim Taylor