Guohai Securities·2024-02-26 16:00Investment Rating - The report maintains a "Buy" rating for Lenovo Group (00992) [1] Core Views - Lenovo Group's FY2023/24Q3 financial results show a recovery in revenue, gross profit, and net profit, indicating that the company's performance is on the rebound after hitting a low point [4] - The net profit for the quarter exceeded Bloomberg consensus estimates by 10%, aligning with the continuous improvement in net profit margin, which was primarily driven by effective management of expenses [4] - The company is expected to benefit from the recovery in the PC market and the scaling of AI PC products, which will support revenue growth and margin improvement [4][6] Summary by Sections Financial Performance - For FY2023/24Q3, Lenovo reported revenue of $15.721 billion, a year-over-year increase of 3% and a quarter-over-quarter increase of 9% [3] - Gross profit was $2.601 billion, remaining flat year-over-year and increasing by 3% quarter-over-quarter [3] - Net profit attributable to shareholders was $337 million, reflecting a year-over-year decrease of 23% but a quarter-over-quarter increase of 35% [3] Business Segments - The Intelligent Devices Group (IDG) achieved revenue of $12.362 billion, with a year-over-year growth of 7% and a quarter-over-quarter growth of 7%, exceeding Bloomberg consensus by 4% [6] - The Infrastructure Solutions Group (ISG) reported revenue of $2.473 billion, down 13% year-over-year but up 24% quarter-over-quarter, indicating a gradual recovery [6] - The Solutions and Services Group (SSG) generated revenue of $2.021 billion, a year-over-year increase of 10% and a quarter-over-quarter increase of 5%, marking a historical high [6] Future Outlook - Revenue forecasts for FY2024-2026 are adjusted to $56.131 billion, $60.283 billion, and $71.086 billion respectively, with net profits projected at $919 million, $1.219 billion, and $1.821 billion [8] - The expected EPS for FY2024-2026 is $0.08, $0.10, and $0.15, with corresponding P/E ratios of 14.42X, 10.87X, and 7.28X [8]