LENOVO GROUP(HK:00992) Huaan Securities·2024-10-03 02:09Investment Rating - The investment rating for Lenovo Group is "Buy" (首次) [1] Core Views - Lenovo Group is a leading player in the PC market and a comprehensive service provider for hardware and software [1] - The PC market is showing signs of recovery, with Lenovo being the first to launch AIPC products, which are expected to drive business growth [1][20] - The demand for AI servers is increasing, driven by the rapid iteration of AI models, and Lenovo's infrastructure solutions are positioned to benefit from this trend [1][50] Summary by Sections Company Overview - Lenovo Group was established in 1984 and is a global leader in ICT, covering personal computers, smartphones, tablets, servers, and data center solutions [7] - The company has undergone three phases: focusing on PC business (1984-2013), deepening server business transformation (2014-2018), and expanding solution business strategy (2019-present) [7] IDG: PC Market Recovery and AIPC Product Growth - The global PC market is recovering, with Q1 and Q2 2024 shipments of 59.8 million and 64.9 million units, respectively, showing year-on-year growth [1][20] - Lenovo maintains the top position in global PC shipments, with a market share of 22.7% in Q2 2024 [22] - The product matrix includes high-end, mid-range, and budget options, catering to various market segments [25][32] ISG: AI-Driven Server Growth - The demand for AI servers is expanding, with global server shipments expected to reach 16.09 million units in 2024 [50] - Lenovo's ISG business generated $8.92 billion in revenue in FY2024, accounting for 14.6% of total revenue [15] - The ThinkSystem series is the core product line for the ISG business, offering various server types [59] SSG: Comprehensive IT Solutions - The SSG business provides end-to-end IT solutions, including support services, operations services, and project solutions [16] - In FY2024, SSG generated $7.47 billion in revenue, representing 12.3% of total revenue [16] Financial Analysis - Revenue projections for Lenovo Group are $56.86 billion, $62.60 billion, and $68.65 billion for FY2024, FY2025E, and FY2026E, respectively [2] - The net profit for FY2024 is projected at $1.01 billion, with a year-on-year decline of 37.1% [2] Market Position and Strategy - Lenovo's strategic layout includes three major business groups: IDG, ISG, and SSG, which cover AI-enabled smart terminals, AI-driven infrastructure, and AI-native services [8][9] - The company is focused on developing new smart device products and solutions, enhancing its market position in the AI and server sectors [13][15]