LENOVO GROUP(00992) 国信证券·2024-07-24 00:01Investment Rating - The report assigns an "Outperform" rating for the company for the first time [2]. Core Views - The company is a global leader in the ICT sector, with a strong position in the personal computer market and a focus on AI-driven products [4][6]. - The introduction of AI PC products is expected to drive new growth opportunities in the personal computer and smart terminal sectors [4][10]. - The company is actively pursuing a mixed AI strategy to enhance its product offerings and infrastructure solutions [5][19]. Summary by Sections Company Overview - The company, founded in 1984, provides a range of products including personal computers, smartphones, and cloud infrastructure solutions, with a focus on intelligent transformation through its "3S Strategy" [4][6]. Market Performance - In Q2 2024, global PC shipments increased by 3.1% year-on-year, with the company achieving a 4% increase in its PC shipments, maintaining a 23.6% market share [3]. - The company’s x86 server sales in China grew by 200.2% year-on-year, significantly outperforming the market [3]. Financial Performance - For the fiscal year 2023/24, the company reported revenues of 1.011 billion, down 37.15% [13][21]. - The company is expected to recover in the second half of the fiscal year, with a projected net profit growth of 20.9% to $1.222 billion in 2024/25 [21]. Business Segments - The company operates three main business groups: Intelligent Devices Group (IDG), Infrastructure Solutions Group (ISG), and Solutions Services Group (SSG) [8][16]. - The IDG remains the largest revenue source, although its share has decreased from 83.47% to 73.12% from 2020/21 to 2023/24 [15][16]. - The ISG and SSG are growing in importance, with their revenue shares increasing to 14.63% and 12.25%, respectively [16]. Future Outlook - The company anticipates that AI PCs will transition from high-end products to mainstream offerings, driving a new cycle of industry growth [10]. - Revenue projections for the next three fiscal years indicate a recovery, with expected growth rates of 6.30%, 9.34%, and 6.85% [21][22]. Valuation - The target price for the company is set between HKD 13.85 and HKD 15.39, based on a relative valuation approach [25][26].