Orient Securities·2024-05-27 12:02Investment Rating - The report maintains a "Buy" rating for the company with a target price of 13.96 HKD [5][3]. Core Insights - For the fiscal year 2023/2024, the group achieved revenue of approximately 56.9 billion USD, a decrease of 8% year-on-year, and a non-GAAP 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 [2]. - The smart devices segment reported record revenue in the fourth fiscal quarter, with AI PCs expected to drive new growth. The segment's total revenue for the year was approximately 44.6 billion USD, down about 10%, with fourth-quarter revenue nearing 10.5 billion USD. The recent launch of the personal AI assistant "Lenovo Xiaotian" and the first AI PC series is anticipated to enhance device capabilities [2]. - The infrastructure solutions segment is developing an AI product portfolio, with strong growth across multiple businesses. Despite a 9% year-on-year decline in annual revenue to 8.9 billion USD due to a supply shortage of AI graphics processors, fourth-quarter revenue increased by 15% year-on-year to 2.5 billion USD. The group plans to launch a comprehensive AI product lineup in February 2024 [2]. - The solutions services segment achieved record revenue and profit, becoming a significant growth engine. Driven by enterprise clients' digital transformation, the segment's revenue reached 7.5 billion USD, up 12% year-on-year, with operating profit rising 11% to 1.5 billion USD and an operating margin of 21.4% [2]. Financial Forecast and Investment Recommendations - The company is projected to have earnings per share of 0.11, 0.14, and 0.17 USD for the fiscal years 2024/2025, 2025/2026, and 2026/2027, respectively. The previous forecasts for 2024/2025 and 2025/2026 were 0.10 and 0.12 USD, respectively, reflecting upward adjustments in revenue and pre-tax profit margins. The target price corresponds to a PE ratio of 16.82 for comparable companies in 2024 [3].