Financial Data and Key Metrics Changes - JD Health achieved revenue of RMB 35.3 billion in H1 2025, representing a year-over-year increase of 24.5% [19] - The gross profit margin increased to 25.5%, up 1.6 basis points year-over-year, reflecting improved supply chain efficiency [27] - Non-IFRS net profit rose by 35% year-over-year to RMB 6.36 billion, with a margin of 10.1%, an increase of 80 basis points [31] Business Line Data and Key Metrics Changes - Direct sales revenue increased by 22.7% year-over-year to RMB 29.3 billion, accounting for 83.1% of total revenue [20] - Service revenue reached RMB 6 billion, growing 34.4% year-over-year and representing 16.9% of total revenue [22] - The number of merchants on the online marketplace exceeded 115,000, an increase of over 15,000 since December 31, 2024 [23] Market Data and Key Metrics Changes - The online medical insurance payment services reached nearly 200 million people nationwide [24] - Instant delivery service now connects over 200,000 pharmacies across China [24] - The annual active user count reached 200 million, with a net addition of approximately 20 million compared to the previous year [20] Company Strategy and Development Direction - The company aims to enhance supply chain management and improve accessibility to pharmaceutical and healthcare products [16] - JD Health is focusing on integrating online and offline services to create a comprehensive healthcare ecosystem [17] - The strategy includes leveraging AI technologies to optimize healthcare services and improve user experience [40] Management's Comments on Operating Environment and Future Outlook - Management highlighted the positive trends in health consumption and the expanding market size driven by supportive policies [36] - The company plans to continue promoting technological innovation and enhancing user experience through AI applications [40] - Future strategies will focus on personalized health services and expanding the healthcare service ecosystem [17] Other Important Information - The company launched over 30 new products in H1 2025, including treatments for various health conditions [10] - JD Health has established five core specialty areas in healthcare services, including dermatology and mental health [26] - The company is committed to advancing the Health China 2030 initiative through partnerships and innovative service models [17] Q&A Session Summary Question: What are the middle and long-term strategies of the company? - Management emphasized the importance of adapting to health consumption changes and leveraging AI to meet user needs [36][38] Question: Can you elaborate on the AI strategy? - The company is focused on deploying AI across its services to enhance efficiency and user experience, with significant user engagement reported [42][44] Question: What is the outlook for new business formation in the second half of the year? - Management indicated plans to accelerate the rollout of next-generation pharmacies and enhance synergies between existing and new services [46][48] Question: What developments are there in medical insurance payment services? - The company aims to enhance online matching with medical insurance services and explore new healthcare service scenarios [50][52]

Financial Data and Key Metrics Changes - JD Health achieved revenue of RMB 35.3 billion, up 24.5% year over year [19] - Direct sales revenue increased to RMB 29.3 billion, constituting 83.1% of total revenue, a year-over-year increase of 22.7% [20] - Service revenue reached RMB 6 billion, representing a growth of 34.4% year over year, accounting for 16.9% of total revenue [22] - Gross profit margin increased to 25.5%, up 1.6 basis points year over year [27] - Non-IFRS net profit increased by 35% year over year to RMB 6.36 billion, with a margin of 10.1%, rising 80 basis points year over year [31] Business Line Data and Key Metrics Changes - Over 30 new pharmaceutical products were launched in the first half of the year, including treatments for various health issues [10][21] - Instant delivery service now connects over 200,000 pharmacies nationwide [24] - The number of merchants on the marketplace exceeded 115,000, an increase of over 15,000 since December 31, 2024 [23] Market Data and Key Metrics Changes - Annual active users reached 200 million, with a net addition of approximately 20 million compared to June 30, 2024 [20] - The total sales of China's health care service market is projected to reach RMB 15 trillion by 2030 [7] Company Strategy and Development Direction - The company aims to strengthen its integrated online and offline medical service ecosystem and promote technological innovation [16] - Focus on enhancing supply chain management and improving accessibility of health care products and services [16][17] - Commitment to AI application in health care to improve service efficiency and user experience [15][40] Management Comments on Operating Environment and Future Outlook - Management highlighted the positive trends in health consumption and the expansion of the market size due to supportive policies [36] - The company plans to continue leveraging AI technologies to refine health care services and improve user experience [40][44] Other Important Information - The company has established five core specialty areas in health care services, including dermatology and mental health [26] - JD Health's online hospital has launched over 500 intelligent agents, making it one of the largest online medical platforms in the industry [15] Q&A Session Summary Question: What are the middle and long-term strategies? - Management emphasized the expansion of the health care market and the importance of personalized health services [36][37] Question: Can you share more about the AI strategy? - The company is focused on deploying AI across its services to improve efficiency and user experience [41][42][44] Question: What is the status of new business formation, especially in the second half of the year? - The company is accelerating the rollout of next-generation pharmacies and enhancing user experience through omnichannel supply chain integration [45][46][48] Question: What are the developments in medical insurance payment? - The company aims to enhance online matching purchase with medical insurance services and explore new health care service scenarios [50][52]

Financial Data and Key Metrics Changes - In Q2 2025, JD Logistics reported total revenue of RMB 51.56 billion, reflecting a year-over-year growth of 16.6% [6][27] - Revenue from external customers reached RMB 33.8 billion, increasing by 10.2% year-over-year [6] - Non-IFRS profit was approximately RMB 2.59 billion, up 5.4% year-over-year, with a non-IFRS profit margin of 5% [7][36] - IFRS profit was RMB 2.35 billion, marking a 4.6% increase year-over-year, with an IFRS profit margin of 4.2% [27] Business Line Data and Key Metrics Changes - Revenue from ISV customers totaled RMB 26.91 billion, up 26.3% year-over-year, with revenue from JD Group increasing by 31.2% [7][27] - The number of external ISC customers reached 65,848, a 13.8% increase year-over-year [8][28] - Average revenue per external ISC customer was RMB 139,000, representing a year-over-year growth of 3.5% [28] Market Data and Key Metrics Changes - Revenue from other customers, primarily including Express and Freight Delivery services, reached RMB 24.66 billion, up 7.2% year-over-year [15][28] - The company maintained a leading position in customer satisfaction ratings among logistics service providers in China [19] Company Strategy and Development Direction - The company is focused on enhancing industry-specific service capacities and upgrading supply chain offerings to meet unique customer needs [9][10] - JD Logistics is expanding its overseas footprint, launching Joy Express in Saudi Arabia and establishing a comprehensive logistics network [14][15] - The company aims to optimize customer experience, cost, and efficiency while adhering to a customer-first approach [25][38] Management's Comments on Operating Environment and Future Outlook - Management noted that the logistics industry continues to play a vital role in China's economic recovery, driving revenue growth through enhanced service capabilities [5][6] - The company expects to maintain growth momentum in the second half of 2025, particularly in international markets [44][45] - Management emphasized the importance of technological innovation and operational model improvements for long-term growth [36][38] Other Important Information - Employee benefit expenses increased by 20.1% year-over-year, reflecting a rise in frontline operation employees [31] - The company has invested in automation and technology to enhance operational efficiency and reduce costs [22][35] Q&A Session Summary Question: What are the growth triggers and expectations for the next half year? - Management highlighted that growth is driven by retail and contributions from JD Group, with positive outcomes from collaborations and improvements in rider contributions [41][42] Question: Can you provide details about the food delivery business and its synergies? - Management stated that the food delivery business is expanding, with new riders being recruited and synergies between riders and couriers improving efficiency [50][52] Question: What are the expectations for external ISC growth in the second half? - Management expressed confidence in the growth trajectory of external ISC customers, citing cost-effective services and strong demand [55][60]

Financial Data and Key Metrics Changes - In Q2 2025, JD Logistics reported total revenue of RMB 51.56 billion, reflecting a year-over-year growth rate of 16.6% [7] - Revenue from external customers reached RMB 33.8 billion, increasing by 10.2% year-over-year [7] - Non-IFRS profit was approximately RMB 2.59 billion, up 5.4% year-over-year, with a non-IFRS profit margin of 5% [35][37] - IFRS profit was RMB 2.35 billion, marking a 4.6% year-over-year increase, with an IFRS profit margin of 4.2% [27] Business Line Data and Key Metrics Changes - Revenue from ISV customers totaled RMB 26.91 billion, up 26.3% year-over-year, with revenue from JD Group increasing by 31.2% [8][27] - The number of external ISC customers reached 65,848, a 13.8% increase year-over-year [9][28] - Average revenue per external ISC customer was RMB 139,000, representing a year-over-year growth of 3.5% [28] Market Data and Key Metrics Changes - Revenue from other customers, primarily including Express and Freight Delivery services, reached RMB 24.66 billion, up 7.2% year-over-year [15][28] - The company maintained a leading position in customer satisfaction ratings among logistics service providers in China [18] Company Strategy and Development Direction - The company is focused on enhancing industry-specific service capacities and upgrading supply chain offerings tailored to customer needs across various industries [10][14] - JD Logistics is actively expanding its overseas footprint, launching Joy Express in Saudi Arabia and establishing a comprehensive logistics network [14][15] - The company aims to optimize customer experience, cost, and efficiency while adhering to a customer-first approach [25][37] Management's Comments on Operating Environment and Future Outlook - Management noted that the growth momentum is driven by retail and contributions from the JD Group, with expectations for continued growth in the second half of 2025 [40][41] - The company is optimistic about its international business expansion, particularly in the Asia Pacific, Europe, and the Middle East [42][44] - Management emphasized the importance of technological innovation and service upgrades to maintain competitive advantages [22][37] Other Important Information - Employee benefit expenses increased by 20.1% year-over-year, reflecting a rise in the number of frontline operation employees [30] - The company has deployed hundreds of unmanned vehicles across various properties in China to enhance operational efficiency [24] Q&A Session Summary Question: What are the growth triggers and expectations for the next half year? - Management indicated that growth is driven by multiple factors, including retail performance and contributions from riders, with positive outcomes expected from collaborations [40][41] Question: Can you provide details about the food delivery service and its synergies with other sectors? - Management highlighted the recruitment of new riders and the natural integration of food delivery with existing services, aiming to improve efficiency and personal income for employees [49][51] Question: What are the expectations for external ISC growth in the second half? - Management expressed confidence in the growth trajectory of external ISC customers, citing cost-effective services and tailored solutions for various industries [54][59] Question: What are the long-term expectations for gross margin? - Management believes there is room for improvement in gross margin due to better customer experiences and product offerings, with expectations for increased revenue and profit in the long run [59][60]

Financial Data and Key Metrics Changes - Revenues increased by over $8 billion, with $1.3 billion attributed to favorable foreign exchange movements [4] - Underlying net earnings showed strong growth, although not as high as double-digit growth might suggest due to complex non-cash write-down impacts [5] - EBITDA increased by approximately $700 million, with about 13% of that growth due to favorable foreign exchange movements [7] - Operating free cash flow rose by $2.1 billion, reflecting an 11% growth compared to the first half of last year [8] - Net debt ratio decreased from 17% at the end of the first half last year to 14.7% [9][26] Business Line Data and Key Metrics Changes - Ports division throughput increased by 4% to 44 million TEU, with EBITDA rising by 10% in reported currency [29][30] - Retail division EBITDA for the first half reached HKD 8 billion, a 12% increase over last year, despite challenges in the Health and Beauty China segment [33][34] - Infrastructure showed a 6% increase in EBITDA in local currencies, maintaining a strong financial profile [41][44] - CKH Group Telecom reported a 4% growth in underlying EBITDA, with significant contributions from treasury gains [46][50] Market Data and Key Metrics Changes - The ports division experienced a 7% increase in HPH Trust and a 3% growth in Mainland China [29] - Retail operations in Asia and Europe showed varied performance, with Health and Beauty China under pressure while other segments performed well [34][36] - The telecom market in Europe faced challenges, particularly in Austria, but overall performance remained steady [50] Company Strategy and Development Direction - The company is focused on organic growth and cost efficiencies in the ports division, despite global trade volatility [32] - Retail strategy includes expanding the store network and enhancing the online sales model through dark stores [39][75] - Investment strategy emphasizes growth in existing businesses and value-accretive transactions, with a cautious approach to new investments [79][82] Management's Comments on Operating Environment and Future Outlook - Management expressed a cautious outlook for the second half of the year due to global uncertainties, despite strong first-half performance [8][16] - The company remains committed to maintaining a strong financial profile while exploring growth opportunities in infrastructure and telecom sectors [81][82] - Management highlighted the importance of adapting to changing consumer behaviors and market conditions, particularly in retail [75] Other Important Information - The company reported a significant increase in liquidity, with total liquid assets reaching $137 billion [26] - The average cost of debt decreased to 3.4%, reflecting lower interest rates [26] - Sustainability efforts are ongoing, with a focus on emissions reductions and compliance with international standards [70] Q&A Session Summary Question: Will future dividends be based on reported or recurring earnings? - Dividends are determined by the board, considering underlying performance and financial fundamentals, generally excluding non-cash accounting losses [72] Question: What strategic actions is Health and Beauty China taking to improve performance? - The division is transforming its business model by integrating dark stores for online fulfillment, despite temporary margin impacts [73][75] Question: Why is the nature of the one-time FX loss different from previous disclosures? - The difference is due to the transition from Hong Kong FRS to International Financial Reporting Standards, affecting the exchange reserve and valuation [78] Question: What is the group's investment strategy if net debt decreases significantly? - The group will focus on growth and value-accretive transactions, primarily within existing businesses, while maintaining a cautious investment approach [79][82] Question: Is regulatory approval from China required for the proposed ports transaction? - Yes, the transaction requires approval from multiple regulatory authorities, including those in China and the US [83][84] Question: What are the uses of the cash received from the merger? - Proceeds from the merger are being used for bond buybacks and to strengthen liquidity, with options for deleveraging or repatriation [87][89]

Financial Data and Key Metrics Changes - Revenue for the first half of 2025 reached CNY 39.13 billion, an increase of 12.7% compared to 2024 [2] - Profit before IP revaluation was CNY 6.8 billion, with a per share profit of CNY 1.94, up 1.6% [2] - Profit attributable to shareholders decreased to CNY 6.3 billion or CNY 1.8 per share, down 26.2% [3] - Recurring revenue increased to CNY 31.76 billion, representing 81% of total revenue, while recurring profit contribution improved to CNY 8.5 billion, accounting for 83% of profit contribution [3] Business Line Data and Key Metrics Changes - Property sales revenue increased to CNY 7.34 billion, up almost 59%, but profit contribution decreased by 2.9% to CNY 1.77 billion [4] - Property rental revenue was CNY 3 billion, down 3.7%, with a profit contribution of CNY 2.3 billion, down 5.3% [6] - Hotel and service suite revenue reached CNY 2.2 billion, up 2.9%, while profit contribution was CNY 794 million, down 3.5% [9] - Infrastructure and utility operations saw revenue of CNY 12.5 billion, up 5.9%, with profit contribution increasing by 5.4% to CNY 629 million [11] Market Data and Key Metrics Changes - Contribution from Hong Kong was 27%, Mainland China 15%, and overseas markets 58% [3] - Overall occupancy in Hong Kong was around 86%, while the European portfolio exceeded 99% [6] - The retail properties experienced an 11.5% drop in revenue, primarily due to the expiration of a joint venture in Shanghai [7] Company Strategy and Development Direction - The company aims to maintain a low leverage while generating significant cash flow for new investments, particularly in commercial and retail properties in Hong Kong [21][23] - The focus is on returns and risks rather than specific sectors or regions for new investments [25] - The company is interested in land replenishment and corporate lending transactions in Hong Kong [26] Management's Comments on Operating Environment and Future Outlook - The macro environment remains uncertain, but there is optimism regarding cash generation and potential interest rate decreases [21] - The Hong Kong residential property market is expected to see generous launch pricing due to high inventory levels [27] - The company is targeting Hong Kong buyers for properties in the Greater Bay Area, with positive responses reported [31] Other Important Information - The company has a total land bank of 124 million square feet, with 67 million square feet under development [16] - The company maintains a stable credit rating from Moody's and Standard & Poor's [15] Q&A Session Summary Question: What is your view on earnings in the next few years, particularly your earnings from development operations? - Earnings from recurring income businesses are expected to remain strong, but earnings from development operations will not be significant in the next few years [20][20] Question: What is the company's capital allocation strategy for the remainder of the year? - The company will not expand or invest at the expense of leverage and is focused on maintaining cash flow while exploring new investments [21][22] Question: What are the key criteria for new investments and acquisitions? - The focus is on returns and risks rather than specific sectors or regions, with an interest in land replenishment and property investments in Hong Kong [25][26] Question: What is your view on the Hong Kong residential property market? - The primary market has seen increased volume, but price momentum is lacking due to high inventory levels [27] Question: Could you provide an update on the completion schedule of the Anderson Road project? - A delay in the project completion date cannot be avoided, but the impact on operations is expected to be small [29] Question: What kind of development margins should we expect for the full year? - The second half is expected to contribute profit from several projects, but Blue Coast will incur losses [30] Question: What is your strategy to generate sales momentum in the Mainland? - Marketing campaigns targeting Hong Kong buyers for properties in the Greater Bay Area have shown good responses [31] Question: What is the outlook for the pub division in the UK? - The team is working to improve efficiency and protect operating margins, with hopes for a better second half of the year [37]

Financial Data and Key Metrics Changes - Revenue for the first half of 2025 reached CNY 39.13 billion, an increase of 12.7% compared to 2024 [2] - Profit before IP revaluation was CNY 6.8 billion, with a per share profit of CNY 1.94, up 1.6% [2] - Profit attributable to shareholders was CNY 6.3 billion, or CNY 1.8 per share, down 26.2% due to an IP revaluation deficit of CNY 3 billion [3] - Recurring revenue increased to CNY 31.76 billion, representing 81% of total revenue, while recurring profit contribution improved to CNY 8.5 billion, accounting for 83% of total profit contribution [3] Business Line Data and Key Metrics Changes - Property sales revenue was CNY 7.34 billion, up nearly 59%, but profit contribution decreased by 2.9% to CNY 1.77 billion, with a contribution margin of 24% [4] - Property rental revenue decreased by 3.7% to CNY 3 billion, with a profit contribution of CNY 2.3 billion, maintaining a contribution margin of 77.1% [6] - Hotel and service suite revenue was CNY 2.2 billion, up 2.9%, while profit contribution fell by 3.5% to CNY 794 million [9] - Infrastructure and utility operations saw revenue increase to CNY 12.5 billion, up 5.9%, with profit contribution rising by 5.4% to CNY 629 million [11] Market Data and Key Metrics Changes - Contribution from Hong Kong was 27%, Mainland China 15%, and overseas markets 58% [3] - Overall occupancy in Hong Kong was around 86%, while the European portfolio exceeded 99% [6] - The retail properties experienced an 11.5% revenue drop, primarily due to the expiration of a joint venture in Shanghai [7] Company Strategy and Development Direction - The company aims to maintain a strong recurring income from its investment property portfolio, hotels, and utility operations, while development operations are expected to contribute less in the coming years [20][21] - The capital allocation strategy focuses on maintaining low leverage while generating significant cash flow for new investments, particularly in commercial and retail properties in Hong Kong [21][23] - The company is interested in land replenishment and corporate lending transactions, prioritizing returns and risks over specific sectors or regions [25][26] Management's Comments on Operating Environment and Future Outlook - The management noted that the macro environment remains uncertain, with interest rates expected to decline, but they will manage cash flow carefully [21] - The Hong Kong residential property market is experiencing high inventory levels, leading to generous launch pricing [27] - The company is optimistic about the Greater Bay Area, targeting Hong Kong buyers for properties there [31] Other Important Information - The company has a total land bank of 124 million square feet, with 67 million square feet under development [16][17] - The company maintains a stable credit rating from Moody's and Standard & Poor's, both rated A with a stable outlook [15][16] Q&A Session Summary Question: What is your view on earnings in the next few years, particularly your earnings from development operations? - Earnings from recurring income businesses are expected to remain strong, but earnings from development operations will not be significant [20] Question: What is the company's capital allocation strategy for the remainder of the year? - The company will not expand or invest at the expense of leverage and is focused on maintaining cash flow while being open to new investments [21][22] Question: What are the key criteria for new investments and acquisitions? - The focus is on returns and risks rather than specific sectors or regions, with an interest in land replenishment and property investments in Hong Kong [25][26] Question: What is your view on the Hong Kong residential property market? - The primary market volume has picked up, but price momentum is lacking due to high inventory levels [27] Question: Could you give us an update on the completion schedule of the Anderson Road project? - A delay in the project completion date cannot be avoided, but the impact on operations is small [29] Question: What kind of development margins should we expect for the full year? - The second half will see profit contributions from several projects, but Blue Coast is expected to incur losses [30] Question: What is your strategy to generate sales momentum in the Mainland? - Marketing campaigns targeting Hong Kong buyers for properties in the Greater Bay Area have shown good responses [31] Question: What is the performance outlook for the pub division in the UK? - The team is working to improve efficiency, and while there are cost pressures, the second half is expected to be better [37]

Financial Data and Key Metrics Changes - Revenues increased by over $8 billion, with $1.3 billion attributed to favorable foreign exchange movements [4] - Underlying net earnings showed strong growth, although not as high as double-digit growth might suggest due to complex non-cash write-downs [5] - EBITDA rose by approximately $700 million, with about 13% of that growth due to favorable foreign exchange [7] - Operating free cash flow increased by $2.1 billion, reflecting an 11% growth compared to the first half of last year [8] - Net debt ratio improved from 17% to 14.7% year-on-year, indicating a solid financial position [9][30] Business Line Data and Key Metrics Changes - Ports division throughput increased by 4% to 44 million TEU, with EBITDA rising by 10% in reported currency [33][34] - Retail division EBITDA increased by 12% to HKD 8 billion, driven by strong performance in Europe despite challenges in Health and Beauty China [37][38] - Infrastructure showed a 6% increase in EBITDA in local currencies, maintaining a strong dividend tradition [48] - CKH Group Telecom reported a 4% growth in underlying EBITDA, with significant merger-related expenses impacting results [50] Market Data and Key Metrics Changes - The ports division saw a 7% increase in HPH Trust and stable performance in Europe, while Asia and Australia experienced a 5% increase [33] - Retail operations in Asia and Europe showed varied performance, with Health and Beauty China under pressure but overall retail EBITDA increasing [38][41] - The telecom market in Europe faced challenges, particularly in Austria, but overall performance remained steady [52] Company Strategy and Development Direction - The company aims to focus on organic growth and cost efficiencies in the ports division despite global trade volatility [36] - Retail strategy includes expanding the store network and enhancing online fulfillment capabilities through dark stores [75] - Infrastructure investments are expected to continue, particularly in aging water infrastructure, which presents attractive returns [81] - The company remains cautious about new investments, preferring to focus on value-accretive opportunities within existing businesses [80] Management Comments on Operating Environment and Future Outlook - Management expressed a conservative outlook for the second half of the year due to global uncertainties, despite strong first-half performance [8][12] - The ports division is expected to maintain good earnings growth through organic growth and expanded facilities [36] - Retail management is optimistic about improving Health and Beauty China performance through strategic initiatives [75] - The telecom sector is undergoing a comprehensive review to identify cost reduction opportunities and improve profitability [50] Other Important Information - The company reported a significant foreign exchange impact on working capital, which may not recur in the second half [26] - Sustainability efforts are progressing, with emissions reductions and improved ratings in various sustainability indices [71] Q&A Session Summary Question: Will future dividends be based on reported or recurring earnings? - Dividends are determined by the board, considering underlying performance and financial fundamentals, generally excluding non-cash accounting losses [74] Question: What are the strategic actions on store planning and product portfolio in Health and Beauty China? - The company is transforming the business with dark stores for online fulfillment, which may temporarily impact margins but aligns with customer expectations [75][76] Question: Why is the nature of the one-time loss different from previous disclosures? - The difference is due to the transition from Hong Kong FRS to International Financial Reporting Standards, affecting the exchange reserve and final valuation [78][79] Question: What is the group's investment strategy if net debt decreases significantly? - The company will focus on growth and value-accretive transactions, primarily within existing businesses, while maintaining a cautious approach to capital expenditures [80][83] Question: Is regulatory approval from China required for the proposed ports transaction? - Yes, the transaction requires approval from multiple regulators, including those in China, the US, and the EU, and discussions with a strategic Chinese investor are ongoing [84][86]

Financial Data and Key Metrics Changes - The company reported a record high first quarter revenue of $18.8 billion, representing a 22% year-on-year growth [3][15] - Net income on a non-HKFRS basis increased by 22% to $389 million, while on an HKFRS basis, net income more than doubled to $500 million [4][16] - Non-PC revenue mix reached 47% of total revenues, indicating a significant diversification in revenue streams [5][16] Business Line Data and Key Metrics Changes - The Intelligent Device Group (IDG) generated $13.5 billion in revenue, an 18% year-on-year growth, with PCs and related businesses growing by 19% [6][24] - The Solutions and Services Group (SSG) achieved a record revenue of $2.3 billion, marking a 20% year-on-year increase with an operating margin of over 22% [10][29] - The Infrastructure Solutions Group (ISG) saw a 36% year-on-year revenue growth, reaching $4.3 billion, although it recorded an operating loss of $86 million due to strategic investments [8][28] Market Data and Key Metrics Changes - In China, revenue surged by 36% year-on-year, driven by strong AI PC shipments and leadership in the commercial segment [18][19] - The Asia Pacific region, excluding China, experienced a 39% revenue growth, with significant market share gains in Japan and India [19] - The Americas saw PC market share gains for the ninth consecutive quarter, while EMEA recorded strong bookings in Device as a Service and Software Solutions [19] Company Strategy and Development Direction - The company is executing a hybrid AI strategy aimed at capitalizing on AI opportunities, with a focus on personal and enterprise AI innovations [5][11] - Continuous investment in R&D, which increased by 10% year-on-year to $524 million, is a priority to drive innovation and support the hybrid AI strategy [21][60] - The company aims to maintain its competitive edge through a unique ODM Plus model, combining in-house manufacturing with ODM to enhance flexibility and resilience [50][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating future uncertainties and emphasized the importance of maintaining market share and profitability despite external challenges [5][6] - The company anticipates continued growth in the PC and AI infrastructure markets, with a positive outlook for the remainder of the fiscal year [36][46] - Management highlighted the importance of adapting to market shifts and investing in AI infrastructure to capture growth opportunities [9][10] Other Important Information - The company reported strong cash flow from operations of $1.2 billion, the highest in the past eleven quarters, and a free cash flow of $751 million [20] - The company is focused on building a comprehensive AI ecosystem, including partnerships with major tech firms to enhance its AI offerings [72] Q&A Session Summary Question: Trends for PC in Q3 and Q4 2025 - The company expects continued strong performance in the PC market, with good order visibility and a positive outlook for shipments [36] Question: Update on Middle East business progress - The company is ahead of schedule in building a manufacturing facility in the Middle East and expects to capture additional market share through local partnerships [39] Question: Drivers behind strong growth in SSG - The shift from CapEx to OpEx models is driving strong growth in Device as a Service and Infrastructure as a Service across all geographies [44] Question: Impact of tariff uncertainties on supply chain - The company has not seen significant impacts from tariff uncertainties due to its competitive business model and diversified manufacturing footprint [46][48] Question: Explanation of margin decline despite operating profits - The decline in gross margin is attributed to the growth of the ISG business, particularly in AI servers, which have lower margins compared to other segments [55] Question: R&D investment growth outlook - R&D remains a strategic priority, and the company plans to continue investing in innovation to drive growth across all business segments [60] Question: Market share gains in PCs and smartphones - The company has achieved significant market share gains in both segments, driven by innovation and operational excellence [61][66] Question: Hiring investment in ISG AI capabilities - The company is investing in expanding its AI product portfolio and sales coverage to capture revenue opportunities in the AI infrastructure market [70][72] Question: Key growth drivers for AI server sales - Growth is driven by demand across all segments and geographies, with a notable hypergrowth in China related to AI [75] Question: Strategy to gain share in AIPC market - The company aims to leverage its comprehensive product offerings and innovation to gain market share and expand margins in the AIPC market [80]

Financial Data and Key Metrics Changes - Lenovo reported a record high first quarter revenue of $18.8 billion, representing a 22% year-on-year growth [3][16] - Net income on a non-HKFRS basis increased by 22% year-on-year to $389 million, while on an HKFRS basis, net income more than doubled to $500 million [4][17] - Non-PC revenue mix reached 47% of total group revenues, indicating a significant diversification in revenue streams [5][17] Business Line Data and Key Metrics Changes - The Intelligent Devices Group (IDG) generated $13.5 billion in revenue, an 18% year-on-year increase, with PCs and related businesses growing by 19% [6][25] - The Solutions and Services Group (SSG) achieved a record revenue of $2.3 billion, growing 20% year-on-year with an operating margin of 22% [11][30] - The Infrastructure Solutions Group (ISG) saw a 36% year-on-year revenue growth, reaching $4.3 billion, driven by strong demand in both CSP and SMB segments [8][28] Market Data and Key Metrics Changes - In China, revenue surged by 36% year-on-year, with significant contributions from AI PC shipments [19] - The Asia Pacific region, excluding China, experienced a 39% year-on-year revenue growth, with market share gains in Japan and India [20] - In the Americas, Lenovo achieved PC market share gains for the ninth consecutive quarter, while EMEA saw record bookings in Device as a Service [20] Company Strategy and Development Direction - Lenovo is executing a hybrid AI strategy aimed at capitalizing on AI opportunities, focusing on personal and enterprise AI innovations [5][12] - The company is committed to investing in AI infrastructure and R&D, with a 10% year-on-year increase in R&D spending to $524 million [22][61] - Lenovo aims to maintain its competitive edge through a unique ODM Plus model, combining in-house manufacturing with ODM to enhance flexibility and resilience [51][53] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating future uncertainties, highlighting strong order visibility and market demand for PCs [38] - The company remains focused on expanding market share and profitability despite short-term pressures on margins due to strategic investments [11][29] - Management emphasized the importance of continuous innovation and adaptation to market shifts, particularly in AI and infrastructure [10][12] Other Important Information - Lenovo's cash flow from operations reached $1.2 billion, marking the highest level in the past eleven quarters, with free cash flow rebounding to $751 million [20][21] - The company reported a significant increase in its AI infrastructure business, with revenues more than doubling year-on-year [18][29] Q&A Session Summary Question: Trends for PC in Q3 and Q4 2025 - Management noted strong PC performance and optimistic outlook for the financial year, with good order visibility and growing demand [38] Question: Business progress in the Middle East - Lenovo is ahead of schedule in building a manufacturing facility in the Middle East, aiming to capture additional market share [42][44] Question: Drivers behind SSG growth - The shift from CapEx to OpEx models is driving strong growth in Device as a Service and Infrastructure as a Service across all geographies [46][48] Question: Impact of tariff uncertainties on supply chain - Management indicated minimal impact from tariff uncertainties, attributing strong performance to Lenovo's competitive business model [50][52] Question: Margin outlook and drivers - The decline in margins was attributed to the growth of the ISG business, particularly in AI servers, which have lower gross margins [58] Question: R&D investment growth outlook - R&D remains a priority, with continued investment planned to support the hybrid AI strategy and drive innovation [62] Question: Sustaining market share gains - Management expressed confidence in sustaining market share gains through innovation and operational excellence [66] Question: AI server sales growth drivers - AI server sales growth is driven by demand across all segments and geographies, with significant growth noted in China [80] Question: Strategy for gaining share in AIPC market - Lenovo's strategy focuses on R&D, innovation, and leveraging its comprehensive product ecosystem to gain market share [84]