Ge Long Hui·2026-02-24 07:25Core Viewpoint - Lenovo Group (992.HK) reported outstanding Q3 results for the fiscal year 25/26, with revenue reaching a record high of $22.2 billion, marking an 18% year-on-year increase, driven primarily by AI-related business growth [1][2]. Financial Performance - The company achieved a net profit of $590 million, reflecting a 36% year-on-year increase when excluding non-operating items, with an adjusted net profit margin of 2.7% [2]. - Cost management was effective, with the expense-to-revenue ratio decreasing by 1.3 percentage points to 10.8% year-on-year [2]. - Research and development (R&D) expenses increased by 3% to $640 million, enhancing the efficiency of investment in core areas like AI [2]. Growth Drivers - AI-related business revenue surged by 72%, contributing to 32% of the overall revenue, establishing AI as the core growth engine for the company [1]. - The company has completed a full industry chain layout for AI, with competitive core products such as AI servers and liquid cooling technology [3]. Future Outlook - Optimistic projections for adjusted net profits of $1.82 billion (up 26.2% year-on-year) for fiscal year 25/26 and $2.1 billion (up 21.0% year-on-year) for fiscal year 26/27 [2]. - Revenue is expected to continue steady growth from 2026 to 2028, with improving gross margins and maintaining a return on equity (ROE) above 20% [2]. Investment Rating - The target price is set at HKD 12.6, indicating a potential upside of 36.1% from the closing price of HKD 9.26 on February 13, 2026, with a "Buy" rating maintained [3].