GOLDEN SUN SECURITIES·2024-08-20 06:15Investment Rating - The report maintains a "Buy" rating for Lenovo Group [4] Core Views - Lenovo Group's Q1 fiscal year 2024/25 shows significant revenue and profit growth, with revenue reaching $15.4 billion, a 20% year-over-year increase. The company's non-PC business now accounts for 47% of total revenue, a record high [1] - The ISG segment achieved a record revenue growth rate, with AI server orders expected to reach approximately $7 billion. The AI server pipeline grew over 20% quarter-over-quarter, with order growth exceeding 30% [1] - The IDG segment also reported double-digit growth, with revenue increasing 11% to $11.4 billion. AI PC products are expected to accelerate in the second half of the year, with a target penetration rate of 10% by year-end [1][2] Financial Summary - For the fiscal year 2024/25, the expected revenue is $62.1 billion, with a year-over-year growth of 9.3%. The net profit is projected to be $1.2 billion, reflecting a 17% increase [3][10] - The report forecasts revenue growth for the following years: $68 billion in 2025/26 (9.4% growth) and $77.3 billion in 2026/27 (13.7% growth) [2][3] - The expected net profit for 2025/26 is $1.5 billion (31% growth) and $2 billion for 2026/27 (29% growth) [2][3] Strategic Developments - Lenovo has established a strategic partnership with Alat, involving a $2 billion interest-free convertible bond issuance, aimed at enhancing financial flexibility and expanding customer reach in the MEA region [2] - The company plans to launch more AI PC products globally in the second half of the year, following initial shipments in China [1][2]