LENOVO GROUP(HK:00992) Zhi Tong Cai Jing·2025-08-20 08:49Core Viewpoint - Macquarie's report indicates that Lenovo Group (00992) achieved strong operating profits in its IDG and SSG segments for the first fiscal quarter, exceeding expectations, and maintains a buy rating with a target price of HKD 13.10 [1][2] Group Summaries Intelligent Devices Group (IDG) - Revenue increased by 18% year-on-year, surpassing Macquarie's expectations and market consensus by 6% [1] - Strong growth attributed to significant market share gains in key regions and an increase in average selling price (ASP) [1] - Smartphone revenue experienced double-digit growth, particularly strong in Japan and India [1] - Operating profit margin (OPM) rebounded by 0.3 percentage points to 7.1% [1] - The personal computer market is expected to see mid-to-high single-digit growth for the remainder of the year, driven by Windows 11 upgrades [1] Infrastructure Solutions Group (ISG) - Revenue grew by 36% year-on-year, exceeding Macquarie's expectations and market consensus by 5% and 11% respectively [1] - Growth driven by ongoing collaboration with cloud service providers (CSPs), double-digit growth in enterprise sector revenue, and over 100% growth in AI server revenue [1] Solutions and Services Group (SSG) - Revenue increased by 20% year-on-year, surpassing Macquarie's expectations and market consensus by 9% and 7% respectively [2] - OPM improved by 1.2 percentage points, benefiting from major client contracts across industries and a higher adoption rate of the "capital expenditure to operational expenditure" model [2] - Significant growth in "Device as a Service" and "Infrastructure as a Service," achieving double-digit and triple-digit growth respectively [2] Future Outlook - Macquarie remains optimistic due to several factors: 1) PC replacement cycles and AI upgrades are expected to enhance product mix [2] 2) Steady growth in service revenue (approximately 10%) is anticipated to yield above-average operating profit margins [2] 3) Expansion in server revenue scale is expected to return ISG's operating profit margin to positive territory as capacity increases [2] - Adjustments made to net profit forecasts for fiscal years 2026, 2027, and 2028, with increases of 8%, 12%, and 13% respectively, primarily driven by revenue growth in IDG and ISG [2]