AXIOM International has released a research report that assigns a "shareholding" rating to Lenovo Group (00992). Q4 financial performance is in line with market expectations, and AIPC is a major turning point in the PC industry, driving attractive new product cycles for business users. Net income for fiscal years 2024/25 and 2025/26 is expected to be $1.2 billion and $1.45 billion, respectively, with a target price of HK$12.1.
According to the report, Lenovo's Intelligent Devices Business Group has shown strong recovery in the second half of the fiscal year, thanks to the strong rebound in commercial market demand and sustained and steady growth in market share. In Q4, the revenue of the business group increased by 7% year-on-year, and the operating profit rose by 17%, significantly higher than the same period last year.
The bank mentioned that in the fiscal year, the company's fastest-growing enterprise customers in the solution service business SSG pursued digital transformation and higher productivity, driving the continuous double-digit revenue growth of the solution service business group for the third consecutive year. In the fiscal year 2023/24, its revenue and operating profit increased by 12% and 11% to $7.5 billion and $1.5 billion, respectively, with maintenance service revenue growing by 29% year-on-year and project and solution service revenue growing by 13% year-on-year.