[ET Net News Agency, 10 January 2018] Lenovo Group (00992) said it expects to make a
one-off charge in respect of its deferred tax assets in the sum of about US$400 million to
be included in the unaudited results for the nine months ended 31 December 2017, as a
result of the recently enacted US tax reform legislation, the Tax Cuts and Jobs Act.
Given that the adjustment to be reflected in the financial results is of a non-cash
nature, Lenovo does not expect such adjustment to have any material effect on its
operation or cash flow position. The Act also reduces the statutory rate of the US
corporate income tax. Lenovo believes that such reduction will positively impact the
future earnings of its US operations in the long term.
Its third quarter results announcement will be released on 1 February.
Legend Holdings (03396), the parent company of Lenovo, said it is expected that the
aforesaid impact on the financial performance of Lenovo will reduce the contribution made
by Lenovo to the profit attributable to the equity owners of Legend Holdings for the year
ended 31 December 2017 by about Rmb760 million. (HL)