A business is "sound" if it can make a profit. However, a business is only a good investment for the shareholders if it can make a profit large enough to be in

A business is "sound" if it can make a profit. However, a business is only a good investment for the shareholders if it can make a profit large enough to be in line with the general cost of capital and alternative investments. Lenovo's market cap at the start of this year was $13bn. A $0.4bn profit is a 3% return on equity, in the middle of a strong global growth phase. Normal ROE in the tech sector is 7-10%, so unless they can double or triple this, investors are better of selling up and putting their money in a bond fund (or Lenovo's more profitable competitors).