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Lenovo Group Limited (HK:0992)
:0992
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Lenovo Group (0992) AI Stock Analysis

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HK:0992

Lenovo Group

(OTC:0992)

Rating:74Outperform
Price Target:
HK$11.00
▲(5.36%Upside)
Lenovo Group's stock is rated positively due to strong revenue growth, improved profitability, and attractive valuation metrics. The earnings call emphasized robust performance across various segments, supporting a positive outlook. Nevertheless, liquidity challenges and mixed technical indicators suggest some caution is warranted.
Positive Factors
Market Position
Lenovo continues to expand its market share leadership in PCs with the #1 Global PC Windows Activation share.
Product Innovation
Lenovo launched innovative products like the ThinkBook Plus Jet 7 with a rollable display and AI agents such as Copilot+ and Lenovo Now.
Revenue Growth
March quarter revenue beat again thanks to robust ISG growth.
Negative Factors
AI Server Demand
AI server demand, however, may soften in the near term as corporations delay purchases of high-performance servers, awaiting computing cost reductions post-DeepSeek.
Net Profit Miss
Lenovo’s 4QFY25 reported net profit missed our and consensus estimates at US$90m due to a US$118m loss on the ALAT warrant’s fair value change.
Tariff Uncertainties
Consumer sentiment is negatively impacted by ongoing tariff uncertainties, extending the AI-driven replacement cycle.

Lenovo Group (0992) vs. iShares MSCI Hong Kong ETF (EWH)

Lenovo Group Business Overview & Revenue Model

Company DescriptionLenovo Group Limited is a multinational technology company with headquarters in Beijing, China, and Morrisville, North Carolina, United States. It is a leading global manufacturer and supplier of consumer electronics and computer hardware, specializing in the production of personal computers, tablets, smartphones, workstations, servers, electronic storage devices, IT management software, and smart televisions. The company operates in several sectors including PCs and smart devices, mobile business, and data center services.
How the Company Makes MoneyLenovo Group generates revenue through a diverse range of business segments. The primary source of income is its Intelligent Devices Group (IDG), which includes the PC and Smart Devices (PCSD) and Mobile Business Group (MBG). The PCSD segment is the largest contributor, driven by sales of personal computers, laptops, and tablets. The MBG focuses on smartphones and other mobile technology. Additionally, Lenovo's Data Center Group (DCG) provides enterprise-level technology solutions, including servers, storage, and networking products. Lenovo also earns through its Software and Services Group (SSG), offering IT management and support services. Key partnerships with technology firms for joint ventures and strategic collaborations in research and development further bolster its revenue. Market presence in over 180 countries and a strong global supply chain also enhance Lenovo's profitability.

Lenovo Group Earnings Call Summary

Earnings Call Date:May 22, 2025
(Q4-2025)
|
% Change Since: 3.16%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Lenovo's strong financial performance with record revenue growth, significant profit increases, and robust performance across various segments and geographies. However, the impact of unexpected tariffs and increased financial charges from warrants posed challenges.
Q4-2025 Updates
Positive Updates
Record-Breaking Revenue Growth
Group revenue saw robust growth of more than 21% year-on-year to reach USD 69 billion, the second highest ever.
Significant Profit Increase
Non-HKFRS net profit surged by 36% year-on-year to USD 1.4 billion.
Diversified Revenue Mix
Non-PC revenue mix reached 47%, up almost 5 points year-on-year.
Strong Performance Across Geographies
All geographies gained double-digit growth year-on-year, reflecting Lenovo's global vitality and resilience.
Smartphone Segment Achievement
Smartphone revenue reached a historical high with a hyper growth of 27% year-on-year.
Infrastructure Solutions Group Growth
ISG experienced hyper growth with record revenue and achieved profitability for two consecutive quarters.
Solutions & Services Group Success
SSG achieved record revenues and profits, with revenue increasing by 13% year-on-year and a record operating profit of USD 1.8 billion.
Negative Updates
Tariff Impact
Unexpected tariffs had a significant impact on performance, with a notable impact of approximately USD 50-60 million.
Inventory Days Increase
Inventory days increased by 5 year-on-year, resulting in an increase in the cash conversion cycle to end the year at 2 days.
Financial Charges from Warrants
The fair value adjustment to the warrants resulted in a USD 118 million impact in operating expenses.
Company Guidance
During Lenovo's earnings investor webcast, the company reported robust financial performance for the fiscal year 2024-2025. Group revenue increased by 21% year-on-year, reaching USD 69 billion, while non-Hong Kong Financial Reporting Standards (HKFRS) net profit surged by 36% to USD 1.4 billion. The revenue from non-PC segments rose to 47%, up almost 5 percentage points from the previous year. Lenovo's Intelligent Device Group (IDG) recorded a double-digit revenue growth and expanded its market leadership in PCs and smartphones, with the latter achieving a 27% year-on-year revenue growth. Infrastructure Solutions Group (ISG) saw hyper growth with a 63% increase in revenue, leading to sustained profitability over two consecutive quarters. Solutions & Services Group (SSG) also experienced double-digit revenue growth, with an operating margin of 21%. During the fourth quarter, Lenovo's group revenue grew by 23% year-on-year, and net income rose by 25% on a non-HKFRS basis, despite challenges from tariffs. The company emphasized its strategic focus on AI-driven growth, with significant investments in research and development to capitalize on hybrid AI opportunities.

Lenovo Group Financial Statement Overview

Summary
Lenovo Group exhibits strong revenue growth and improved profitability, supported by efficient cost management. However, the low net profit margin and negative free cash flow highlight potential challenges in sustaining cash generation. The balance sheet is moderately leveraged, with effective use of equity, but faces potential risks due to low equity ratio. Continued focus on improving cash flows and maintaining financial stability is crucial for future growth.
Income Statement
78
Positive
Lenovo Group has demonstrated strong revenue growth over the past year, with a notable increase from $56.86 billion to $69.08 billion, indicating a growth rate of 21.30%. The gross profit margin improved to 16.06%, showcasing efficient cost management. The net profit margin rose to 2.00% from the previous period, reflecting improved profitability. However, despite the growth, net income margins remain relatively low, which could be a concern in sustaining long-term profitability.
Balance Sheet
72
Positive
The company's debt-to-equity ratio stands at 0.94, suggesting a balanced capital structure with moderate leverage. Return on equity (ROE) improved to 22.81%, indicating effective utilization of shareholder funds. The equity ratio is 13.72%, showing a reasonable level of equity financing. However, the relatively low equity ratio might indicate vulnerability to financial instability in high leverage scenarios.
Cash Flow
65
Positive
Operating cash flow decreased significantly, resulting in a negative free cash flow of -$51.33 million, reflecting challenges in converting revenue into cash. The operating cash flow to net income ratio is 0.79, suggesting limited cash efficiency. The free cash flow to net income ratio is negative, indicating potential liquidity issues if this trend persists. Despite these challenges, financing activities increased, reflecting efforts to maintain liquidity.
BreakdownMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue69.08B56.86B61.95B71.62B60.74B
Gross Profit11.10B9.80B10.50B12.05B9.77B
EBITDA3.67B3.54B3.80B4.29B3.10B
Net Income1.38B1.01B1.61B2.03B1.21B
Balance Sheet
Total Assets44.23B38.75B38.92B44.51B37.99B
Cash, Cash Equivalents and Short-Term Investments4.76B3.63B4.32B3.96B3.13B
Total Debt5.73B3.96B4.36B5.93B4.42B
Total Liabilities37.57B32.67B32.87B39.12B34.38B
Stockholders Equity6.07B5.58B5.59B4.99B3.56B
Cash Flow
Free Cash Flow-51.33M725.09M1.22B2.79B2.81B
Operating Cash Flow1.10B2.01B2.80B4.08B3.65B
Investing Cash Flow-1.06B-1.28B-1.92B-1.50B-975.90M
Financing Cash Flow1.19B-1.34B-413.78M-1.76B-3.23B

Lenovo Group Technical Analysis

Technical Analysis Sentiment
Positive
Last Price10.44
Price Trends
50DMA
9.53
Positive
100DMA
9.82
Positive
200DMA
10.04
Positive
Market Momentum
MACD
0.26
Negative
RSI
70.29
Negative
STOCH
88.27
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0992, the sentiment is Positive. The current price of 10.44 is above the 20-day moving average (MA) of 9.87, above the 50-day MA of 9.53, and above the 200-day MA of 10.04, indicating a bullish trend. The MACD of 0.26 indicates Negative momentum. The RSI at 70.29 is Negative, neither overbought nor oversold. The STOCH value of 88.27 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0992.

Lenovo Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$129.50B11.8623.76%0.40%20.98%34.19%
74
Outperform
HK$3.03B11.569.28%4.48%9.98%330.72%
63
Neutral
HK$554.88M15.28-31.98%-37.58%
63
Neutral
$34.78B5.17-11.38%1.67%5.54%-17.15%
54
Neutral
HK$241.22M23.022.61%4.23%-14.89%-59.44%
54
Neutral
€1.10B-10.39%-13.12%-129.61%
48
Neutral
HK$1.03B-7.86%29.97%53.06%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:0992
Lenovo Group
10.44
0.77
8.00%
HK:6939
MEGAIN Holding (Cayman) Co. Ltd.
0.46
-0.04
-8.00%
HK:3638
Huabang Technology Holdings Limited
16.00
9.52
146.91%
HK:2436
LX Technology Group Limited
2.91
-1.82
-38.48%
HK:3336
Ju Teng International Holdings Limited
1.30
0.02
1.56%
HK:1263
PC Partner Group
7.81
3.95
102.12%

Lenovo Group Corporate Events

Lenovo Group to Review Quarterly Financial Results in Upcoming Board Meeting
Jul 18, 2025

Lenovo Group Limited has announced a board meeting scheduled for August 13, 2025, to review and potentially approve the unaudited financial results for the quarter ending June 30, 2025. The results are expected to be published on August 14, 2025, which could provide insights into the company’s financial health and performance, impacting investor and stakeholder perceptions.

The most recent analyst rating on (HK:0992) stock is a Buy with a HK$12.80 price target. To see the full list of analyst forecasts on Lenovo Group stock, see the HK:0992 Stock Forecast page.

Lenovo Adjusts Bond Conversion and Warrant Exercise Prices Following Dividend Declaration
Jul 17, 2025

Lenovo Group Limited has announced an adjustment in the conversion price of its US$2 billion zero-coupon convertible bonds due 2028 and the exercise price of its warrants, following the declaration of a final dividend. The conversion price will be adjusted from HK$10.02 to HK$9.70 per share, and the exercise price of the warrants will change from HK$12.31 to HK$11.92 per share, effective August 2, 2025. These adjustments are expected to impact the company’s financial instruments and may influence shareholder decisions.

The most recent analyst rating on (HK:0992) stock is a Hold with a HK$13.00 price target. To see the full list of analyst forecasts on Lenovo Group stock, see the HK:0992 Stock Forecast page.

Lenovo Group Approves Key Resolutions at Annual General Meeting
Jul 17, 2025

Lenovo Group Limited held its Annual General Meeting on July 17, 2025, where all proposed resolutions were approved by the shareholders. Key resolutions included the approval of the audited financial statements, declaration of a final dividend, re-election of directors, re-appointment of the auditor, and granting of mandates to the directors for share issuance and buybacks. Additionally, a special resolution to amend the Articles of Association was passed, reflecting the company’s commitment to aligning its corporate governance with evolving business needs.

The most recent analyst rating on (HK:0992) stock is a Buy with a HK$15.00 price target. To see the full list of analyst forecasts on Lenovo Group stock, see the HK:0992 Stock Forecast page.

Lenovo Group Announces 2025 Annual General Meeting Agenda
Jun 20, 2025

Lenovo Group Limited has announced its upcoming annual general meeting (AGM) scheduled for July 17, 2025, where key agenda items include the approval of financial statements, declaration of dividends, re-election of directors, and re-appointment of auditors. The meeting will also consider resolutions to authorize the board to manage share allotments and other corporate actions, reflecting the company’s ongoing efforts to maintain robust governance and operational flexibility.

The most recent analyst rating on (HK:0992) stock is a Hold with a HK$13.00 price target. To see the full list of analyst forecasts on Lenovo Group stock, see the HK:0992 Stock Forecast page.

Lenovo Enhances Governance Committee Structure
May 22, 2025

Lenovo Group Limited has announced amendments to the terms of reference for its Nomination and Governance Committee, which was formerly known as the Governance Committee. The changes, adopted by the Board, aim to enhance the governance structure by ensuring a majority of the committee members are independent non-executive directors, complying with the listing rules. This strategic move is expected to strengthen Lenovo’s governance framework, potentially impacting its operational transparency and accountability, thereby benefiting stakeholders.

The most recent analyst rating on (HK:0992) stock is a Hold with a HK$13.00 price target. To see the full list of analyst forecasts on Lenovo Group stock, see the HK:0992 Stock Forecast page.

Lenovo Declares Final Cash Dividend for FY 2025
May 22, 2025

Lenovo Group Limited has announced a final cash dividend of HKD 0.305 per share for the financial year ending March 31, 2025, with payment scheduled for August 13, 2025. This announcement reflects Lenovo’s stable financial performance and commitment to returning value to its shareholders, potentially enhancing its attractiveness to investors.

The most recent analyst rating on (HK:0992) stock is a Hold with a HK$13.00 price target. To see the full list of analyst forecasts on Lenovo Group stock, see the HK:0992 Stock Forecast page.

Lenovo Proposes Governance Amendments and Changes Share Registrar
May 22, 2025

Lenovo Group Limited has announced proposed amendments to its Articles of Association to align with updated legal and regulatory requirements, enhance flexibility in conducting general meetings, and support electronic dissemination of corporate communications. These changes, subject to shareholder approval, aim to modernize the company’s governance structure. Additionally, Lenovo will change its Hong Kong share registrar and transfer office to Tricor Investor Services Limited, effective May 30, 2025, to streamline its share registration and transfer processes.

The most recent analyst rating on (HK:0992) stock is a Hold with a HK$13.00 price target. To see the full list of analyst forecasts on Lenovo Group stock, see the HK:0992 Stock Forecast page.

Lenovo Reports Strong Annual Results with Record Revenues and Proposed Dividend
May 22, 2025

Lenovo Group Limited announced its FY2024/25 annual results, revealing a 37% increase in group profit attributable to equity holders and a 21% rise in revenue year-on-year. The company achieved record revenues across its Infrastructure Solutions Group (ISG) and Solutions & Services Group (SSG), with significant growth in R&D spending fostering innovations in AI and infrastructure. Despite a 64% drop in fourth-quarter profit due to a non-cash fair value loss on warrants, the company showed strong operational performance with a 25% increase in non-HKFRS profit. The board proposed a final dividend of HK30.5 cents per share, subject to shareholder approval.

The most recent analyst rating on (HK:0992) stock is a Hold with a HK$13.00 price target. To see the full list of analyst forecasts on Lenovo Group stock, see the HK:0992 Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 09, 2025