Changjiang Securities·2025-06-07 07:25Investment Rating - The investment rating for Lenovo Group is "Buy" and is maintained [7] Core Insights - Lenovo Group reported FY2025 revenue of $69.077 billion, a year-on-year increase of 21.48%, and a net profit attributable to shareholders of $1.384 billion, up 37.01% year-on-year. The gross margin was 16.07%, down 1.17 percentage points, while the net profit margin was 2.00%, an increase of 0.22 percentage points [2][5] - In Q4 FY2025, Lenovo achieved revenue of $16.984 billion, a year-on-year growth of 22.78%, but the net profit attributable to shareholders fell to $90 million, a decline of 63.71% [2][5] - The decline in GAAP net profit in Q4 FY2025 was primarily due to the accounting treatment of warrants, while the Non-GAAP net profit exceeded expectations, reaching $278 million, a year-on-year increase of 25.08% [8] Summary by Sections Business Performance - The IDG segment achieved revenue of $36.47 billion, a year-on-year increase of 13%, with an operating profit margin of 7.2%. The PC business, a cornerstone for Lenovo, saw an 11% year-on-year revenue growth, increasing its market share to 23.7% [8] - Non-PC business revenue accounted for 47% of total revenue, growing by 5 percentage points year-on-year. The smartphone business revenue grew by 27%, with significant increases in the Asia-Pacific region (179% year-on-year) and Europe, the Middle East, and Africa (32% year-on-year) [8] - The ISG segment reported revenue of $10.48 billion, a year-on-year increase of 63%, achieving profitability for two consecutive quarters. The cloud infrastructure business revenue grew by 92% year-on-year [8] Strategic Outlook - Lenovo's AIPC initiative is positioned as a key growth driver, with the launch of advanced AI products enhancing its market presence. The company has a robust global distribution and production strategy to mitigate tariff and geopolitical risks [8] - Projections for net profit attributable to shareholders are $1.665 billion, $1.916 billion, and $2.214 billion for FY2026, FY2027, and FY2028, respectively, indicating a positive growth trajectory [8]