LENOVO GROUP(HK:00992) Soochow Securities·2024-11-20 06:41Investment Rating - The report maintains a "Buy" rating for Lenovo Group (00992.HK) [1] Core Views - The company reported better-than-expected performance for FY2025 Q2, with total revenue of $17.85 billion, up 23.87% year-on-year and 15.56% quarter-on-quarter, and a net profit of $3.59 billion, up 43.80% year-on-year and 47.29% quarter-on-quarter [1] - The high-end product strategy is showing results, particularly with the Edge and Razr smartphone series, which have seen strong overseas sales [1] - The Infrastructure Solutions Group (ISG) is narrowing its operating losses and improving its market position, with a revenue increase of 65.12% year-on-year [1] - The Solutions and Services Group (SSG) has stable operating profit margins and increasing sustainable revenue, with a revenue increase of 12.85% year-on-year [1] - The company expects to benefit from the AI wave, with adjusted net profit forecasts for FY2025, FY2026, and FY2027 being $1.26 billion, $1.47 billion, and $1.76 billion respectively [1] Summary by Sections Financial Performance - For FY2025 H1, Lenovo achieved revenue of $33.297 billion, a year-on-year increase of 21.92%, and a net profit of $6.02 billion, up 41.36% [1] - FY2025 Q2 revenue was $17.85 billion, with a year-on-year growth of 23.87% and a quarter-on-quarter growth of 15.56% [1] Business Segments - Intelligent Devices Group (IDG): Revenue of $13.514 billion in FY2025 Q2, up 17.37% year-on-year; PC market share reached 23.98% [1] - Infrastructure Solutions Group (ISG): Revenue of $3.305 billion in FY2025 Q2, up 65.12% year-on-year; operating loss narrowed [1] - Solutions and Services Group (SSG): Revenue of $2.165 billion in FY2025 Q2, up 12.85% year-on-year; operating profit margin at 20.4% [1] Profitability and Valuation - The report adjusts net profit forecasts for FY2025, FY2026, and FY2027 to $1.26 billion, $1.47 billion, and $1.76 billion respectively, with corresponding P/E ratios of 11.4, 9.8, and 8.2 [1]