Guotai Junan Securities·2024-02-25 16:00Investment Rating - The report maintains a "Buy" rating for Lenovo Group with a new target price of HKD 11.48 [3][23]. Core Insights - Lenovo's FY24Q3 performance met expectations, with the Intelligent Devices Group (IDG) returning to growth and steady recovery in its main business, leading to improved profitability [3]. - Revenue growth turned positive, with FY24Q3 revenue reaching USD 15.721 billion, a year-on-year increase of 3%, driven by IDG's recovery and an increase in non-PC revenue share to 42% [3]. - The report adjusts net profit forecasts for FY24-26 to USD 1.02 billion, USD 1.21 billion, and USD 1.62 billion respectively, reflecting changes in PC replacement cycles, server demand, and AI PC shipment progress [3][20]. Financial Summary - FY24Q3 revenue was USD 15.721 billion, with a gross margin of 16.5% and a net profit of USD 377 million, resulting in a net profit margin of 2.4% [3][4]. - The Intelligent Devices Group (IDG) achieved revenue of USD 12.362 billion in FY24Q3, a year-on-year increase of 7%, with an operating profit of USD 911 million [3][21]. - The Solutions and Services Group (SSG) reported revenue of USD 2.021 billion, a year-on-year increase of 10%, with operating profit reaching USD 412 million [3][21]. Market Position - Lenovo's PC market share approached 24% in FY24Q3, reinforcing its position as the global leader [3]. - The report highlights the anticipated launch of AI PCs in H1 2024, which is expected to drive a new replacement cycle in the market [3].