Soochow Securities·2024-05-26 10:01Investment Rating - The report maintains a "Buy" rating for Lenovo Group (00992.HK) [1] Core Insights - Lenovo Group's FY2024 performance exceeded market expectations, with Q4 revenue of $13.8 billion, up 10% year-on-year, and a net profit of $248 million, up 118% year-on-year. For the full fiscal year, revenue was $56.9 billion, down 8%, and net profit was $1 billion, down 37% [2][3] Financial Performance Summary - Revenue and Profit Forecasts: - FY2023A total revenue was $61.9 billion, with a forecast of $56.9 billion for FY2024, $61.3 billion for FY2025, $67.9 billion for FY2026, and $73.0 billion for FY2027 [2] - FY2023A net profit was $1.6 billion, with forecasts of $1.0 billion for FY2024, $1.2 billion for FY2025, $1.7 billion for FY2026, and $2.0 billion for FY2027 [2] - IDG Business Performance: - In the latest quarter, the IDG (Intelligent Devices Group) business generated $10.5 billion in revenue, up 7% year-on-year, with operating profit of $800 million, up 17% year-on-year. For FY2024, revenue was $44.6 billion, down 10%, with operating profit of $3.2 billion, down 12% [3] - Non-PC business revenue reached $6.2 billion, accounting for a historical high of 45% of total revenue, with double-digit growth in both shipment and revenue for mobile phones [3] - ISG Business Performance: - The ISG (Infrastructure Solutions Group) business achieved $2.5 billion in revenue, up 15% year-on-year, but reported an operating loss of $97 million. For FY2024, revenue was $8.9 billion, down 9%, with an operating loss of $200 million [3] - Future investments in AI servers are expected to drive recovery in profitability [3] Earnings Forecast and Investment Rating - The report adjusts the FY2025 and FY2026 net profit forecasts to $1.24 billion and $1.73 billion, respectively, and projects a net profit of $1.99 billion for 2027. The latest closing price corresponds to P/E ratios of 14.2, 10.2, and 8.8 times for FY2025, FY2026, and FY2027, respectively, maintaining a "Buy" rating [3]