Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 14.4, representing a potential upside of 31.7% from the recent closing price of HKD 10.93 [6]. Core Insights - The company reported Q1 FY2025/26 earnings that exceeded market expectations, with revenue increasing by 22% year-over-year to USD 18.83 billion, marking a historical high for the same period. Net profit reached USD 505 million, up 108% year-over-year, indicating strong performance across all business segments [1][4]. - The company is committed to its hybrid AI strategy, with R&D investment increasing by 10% year-over-year, aiming to enhance its AI capabilities and improve profitability over time [1][3]. Summary by Sections Smart Devices Business - The Intelligent Devices Group (IDG) generated revenue of USD 13.46 billion, a year-over-year increase of 17.8%. The company's global PC market share reached a record high of 24.6%, with AI PC (AIPC) shipments accounting for over 30% of total PC shipments [2]. - The AIPC penetration rate continues to rise, with AIPC shipments in the Chinese market representing 27% of total notebook shipments. The smartphone business has achieved double-digit revenue growth for seven consecutive quarters [2]. Infrastructure Solutions Business - The Infrastructure Solutions Group (ISG) saw revenue grow by 36% year-over-year, with AI infrastructure revenue doubling and liquid cooling technology revenue increasing by nearly 30%. The dual-track strategy of cloud infrastructure (CSP) and enterprise infrastructure (E/SMB) is showing positive results [2][3]. - Despite recording an operating loss of USD 8.55 million due to investments in AI capabilities, the long-term growth potential remains significant [2]. Solutions Services Business - The Solutions Services Group (SSG) reported a revenue increase of 19.8% to RMB 16.3 billion, achieving a historical high with an operating profit margin of 22.2%, up 1.2 percentage points year-over-year. Strong growth in TruScale orders and high-end services such as hybrid cloud and AI solutions are driving future growth [3]. Strategic Progress - The company is firmly executing its hybrid AI strategy, focusing on scalable AI-driven solutions through its "one body, multiple ends" and "edge-cloud" platforms. The AIPC serves as a personal AI entry point, enhancing supply chain resilience and cost efficiency [3]. Financial and Valuation Summary - For FY2025/26 and FY2026/27, the adjusted net profit is projected to be USD 1.63 billion (up 13.0% year-over-year) and USD 1.89 billion (up 15.9% year-over-year), respectively. The estimated P/E ratio for FY2025/26 is 14.0x [4][5].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 14.6 HKD, representing a potential upside of 23.9% from the recent closing price of 11.7 HKD [6]. Core Insights - The company reported a total revenue of 18.8 billion USD for Q3 of the fiscal year 2024/25, marking a 20% year-over-year increase, and a net profit of 693 million USD, which is a significant 106% increase year-over-year [1]. - The company's diversified growth engines are accelerating, with all main business segments performing exceptionally well [1]. - The company is expected to achieve net profits of 1.55 billion USD and 1.47 billion USD for the fiscal years 2024/25 and 2025/26, respectively [3]. Summary by Sections Smart Devices Business - The Intelligent Devices Group (IDG) revenue grew by 12% to 13.78 billion USD, with a segment profit margin of 7.3% [2]. - The company continues to strengthen its leading position in the personal computer market, with notable sales in gaming and commercial PCs [2]. - The smartphone segment, particularly the Motorola brand, saw double-digit revenue growth and an increase in global market share, exceeding 6% in the global smartphone market (excluding China) [2]. Infrastructure Solutions Business - The Infrastructure Solutions Group (ISG) revenue surged by 59% to 3.94 billion USD, achieving record high revenues for three consecutive quarters [2]. - The business successfully turned profitable with an operating profit of 1 million USD, a significant increase of 39 million USD year-over-year, driven by strong demand for servers due to cloud investments and enterprise business recovery [2]. - The company’s advanced liquid cooling product, Neptune, is expanding its application range across multiple industries, indicating potential for continued growth [2]. Solutions Services Business - The Solutions Services Group (SSG) revenue increased by 12% to 2.26 billion USD, maintaining a strong operating profit margin of 20% [3]. - There was significant growth in operational services and project solutions, with service orders increasing for five consecutive quarters [3]. - The ongoing democratization of AI and the proliferation of AI applications are expected to bolster demand in the industry, with the company aiming to solidify its leading position in edge AI [3]. Financial and Valuation Summary - The company’s revenue is projected to recover from a decline in 2023, with expected growth rates of 19.4% and 9.7% for the fiscal years 2025 and 2026, respectively [5]. - The gross profit margin is expected to stabilize around 15.8% to 16.5% in the coming years [5]. - The return on equity (ROE) is projected to improve to 24.0% by 2025, indicating strong profitability [5].