Orient Securities·2024-05-27 10:02Investment Rating - The report maintains a "Buy" rating for the company with a target price of 13.96 HKD [4][9]. Core Insights - In the fiscal year 2023/2024, the company achieved revenue of approximately 56.9 billion USD, a decrease of 8% year-on-year, and a net profit of 1.01 billion USD, down 37% year-on-year. However, the gross margin reached a new high, marking three consecutive years of growth. In the fourth fiscal quarter, revenue grew by 9% year-on-year to 13.8 billion USD, and net profit surged by 118% year-on-year to 250 million USD [1][9]. - The smart devices segment reported record revenue in the fourth quarter, with AI PCs expected to drive future growth. The segment's annual revenue was approximately 44.6 billion USD, down about 10%, with fourth-quarter revenue nearing 10.5 billion USD. The company recently launched the personal AI assistant "Lenovo Xiaotian" and its first AI PC series, which offers device inference and AI capabilities [1][9]. - The infrastructure solutions segment is developing an AI product portfolio, with strong growth across multiple businesses. Annual revenue was 8.9 billion USD, down 9%, but fourth-quarter revenue increased by 15% year-on-year to 2.5 billion USD. The company plans to launch a new series of AI products, services, and partnerships in February 2024 [1][9]. - The solutions services segment achieved record revenue and profit, becoming a significant growth driver. Revenue reached 7.5 billion USD, up 12% year-on-year, with operating profit rising 11% to 1.5 billion USD. The operating profit margin reached 21.4%, with maintenance service revenue growing by 29% [1][9]. Financial Forecast and Investment Recommendations - The company is forecasted to achieve earnings per share of 0.11, 0.14, and 0.17 USD for the fiscal years 2024/2025, 2025/2026, and 2026/2027, respectively. This is an upward revision from previous forecasts due to increased revenue and pre-tax profit margins. The target price corresponds to a PE ratio of 16.82 for comparable companies [2][9].