Citing pressure from weak global demand and intense competition, China's biggest PC maker by shipments, Lenovo Group Ltd, Thursday posted a $16 million net loss for its fiscal first quarter. For the same quarter last year, Lenovo has posted a $110 million profit!

However, with the loss figures being smaller than anticipated, Lenovo expressed confidence in bringing about a full-year net profit, largely because it feels that there are indications of strengthening demand for PCs in the domestic market; even though it expects challenging operating environment to persist in developed markets, like Japan, North America, and Western Europe.

Commenting on the results for the three months ending June 30, Lenovo's CEO Yang Yuanqing told reporters in a conference call: "Lenovo showed strong progress this last quarter but we still face numerous challenges. We cannot say we have seen the bottom of the global downturn, which continues to significantly impact our core commercial customers."

Lenovo, which acquired IBM Corp.'s PC unit in 2005, said that while its year-on-year domestic sales remained unchanged at $1.7 billion, its global PC shipments rose 1.1 percent from the year-before figures though its industrywide shipments plunged 3.3 percent.

Despite the fact that Lenovo has essentially benefited from the recession-resilient Chinese economy, the company still continues to face competition from the PC industry leader Hewlett-Packard and the second-ranking Dell Inc.!