Buffett's most important indicator! Lenovo (00992) stormed into “Fortune” China's top five “money-making efficiency”

Recently, Fortune Chinese.com and the world simultaneously released the latest “Fortune” Fortune 500 ranking. Among them, the return on net assets (ROE) sub-list is particularly remarkable. In this list, Lenovo Group (00992) ranked among the top 5 companies with the highest return on net assets in China with outstanding performance. This not only highlights its steady strength as a technology giant, but also provides investors with an important reference.

ROE is a key measure of a company's profitability. Calculated by dividing net profit by average net assets, it intuitively reflects the company's efficiency in using its own capital to generate profits for shareholders. Simply put, ROE tells us how much profit we can generate for every dollar invested in net assets. A high ROE usually means that the company has strong profitability and efficient capital management, while a low ROE may suggest insufficient operating efficiency or competitive pressure.

“Stock god” Buffett places special importance on ROE. The investment guru has publicly stated that if he can only select stocks using one indicator, he will choose ROE. The reason is simple: Companies that continue to have high ROE often have a “moat”. Because the core value of the ROE index is that it goes beyond simple profit figures and reveals how a company can optimize its capital structure: a company with a high ROE can not only pay back quickly, but also accelerate growth through reinvestment, thereby increasing shareholder value. In contrast, low ROE may stem from high indebtedness, inefficiency, or industry cyclicality, and investors need to be wary of the potential risks.

In the global ROE list, Cencora jumped to the top with an amazing ROE of over 233%, Home Depot slipped to second place with about 223%, and Apple and AbbVie ranked third and fourth. These high ROE companies often benefit from innovation drive, cost control, and market leadership.

Among the 50 global companies with the highest return on net assets, Pinduoduo ranked 25th in the world with an ROE of over 36%, making it the only Chinese company to enter the top 50. The top 10 Chinese companies in this sub-list are: Pinduoduo Holdings, TSMC, Guangda Computer Company, Zijin Mining Group Co., Ltd., Lenovo Group Co., Ltd., BYD Co., Ltd., Meituan, Ningde Times New Energy Technology Co., Ltd., Tencent Holdings Co., Ltd., and Chery Holding Group Co., Ltd. As a representative of China's TOP5, Lenovo Group's ROE performance highlights the company's continuous innovation and global layout in the fields of PCs, servers, and smart devices. Although the specific ROE value is not detailed in the list, Lenovo's entry into the top list shows that it has effectively improved the efficiency of net asset utilization through supply chain optimization and digital transformation. This not only strengthened its competitiveness in the technology industry, but also set a benchmark for high profits for Chinese companies.

When evaluating a company's value, ROE is a more profound indicator than just revenue or profit. It emphasizes “quality” rather than “quantity” to help investors identify truly efficient companies.

In the current “Fortune” Fortune 500 ranking in 2025, Lenovo Group ranked 196, a significant increase of 52 places compared to last year, and achieved the highest ranking in nearly three years. The reason behind this jump in the ranking of Lenovo Group is its strong performance for the full year of the 2024/25 fiscal year. The last fiscal year was one of the best performing years in Lenovo's history, with annual revenue reaching 498.5 billion yuan, achieving strong year-on-year growth of 21%; revenue in all regions of the world achieved strong year-on-year double-digit growth, fully demonstrating Lenovo's diversified business strength and resilience and vitality as a truly global company.

Since this year, the international environment has become more complex. The new round of technological revolution and industrial transformation led by artificial intelligence technology has developed rapidly, the global innovation landscape is being restructured at an accelerated pace, and the global value chain is facing reshaping. Faced with this highly uncertain external environment, whether an enterprise can continue to innovate, focus on its own business development, and develop a strong anti-vulnerability ability to withstand risks is the key for an enterprise to maintain its global competitiveness.

In this context, Lenovo Group continues to invest in innovation to accelerate the implementation of hybrid artificial intelligence strategies. Innovations in the fields of personal computers, smart devices and data center solutions, as well as continuous breakthroughs in cutting-edge technology fields such as artificial intelligence and high-performance computing, have also been recognized by “Fortune”. As a result, Lenovo Group, along with technology companies such as Alibaba, Tencent, and Baidu, was also included in the “Fortune” China Top 50 Technology Companies.