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Lenovo Group (HK:0992)
:0992

Lenovo Group (0992) AI Stock Analysis

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HK

Lenovo Group

(OTC:0992)

Rating:70Outperform
Price Target:
Lenovo Group has a strong financial foundation and is making strategic advancements, especially in AI and market expansion. Despite this, technical indicators show bearish trends, suggesting caution in the short term. The attractive valuation and positive earnings outlook contribute to a favorable long-term perspective. However, potential risks from tariffs and pricing pressures should be monitored.
Positive Factors
AI Development
Lenovo's leadership in on-device AI development and model compression algorithms suggests they are significantly ahead of other PC brands.
Innovation
Lenovo launched innovative products like the ThinkBook Plus Jet 7 with a rollable display and AI agents such as Copilot+ and Lenovo Now.
Market Position
Lenovo continues to expand its market share leadership in PCs with the #1 Global PC Windows Activation share.
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.
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.
Tariffs and Consumer Sentiment
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 (0992) is a multinational technology company headquartered in Beijing, China, and Morrisville, North Carolina, USA. The company is a leading global manufacturer and marketer of consumer electronics, personal computers, smartphones, and data center solutions. Lenovo's core business sectors include PCs and Smart Devices, Mobile Business, Data Center Group, and Intelligent Devices, providing a broad range of products such as laptops, desktops, tablets, smartphones, workstations, servers, and storage solutions.
How the Company Makes MoneyLenovo Group generates revenue primarily through the sale of hardware products, particularly personal computers, which account for a significant portion of its income. The company operates in several key segments, including the PC and Smart Devices Group, which contributes substantially to its revenue through sales of laptops, desktops, and tablets. Another important segment is the Mobile Business Group, which focuses on smartphones and other mobile devices. Additionally, the Data Center Group provides enterprise customers with servers, storage, and networking solutions, contributing to Lenovo's earnings. The Intelligent Devices Group and associated services also play a role in the company's revenue stream. Lenovo's strategic partnerships with technology giants such as Microsoft and Intel enhance its product offerings and market reach, further boosting its financial performance. Moreover, Lenovo leverages its global supply chain and manufacturing capabilities to maintain cost efficiency and competitive pricing, which positively impacts its profitability.

Lenovo Group Earnings Call Summary

Earnings Call Date:May 22, 2025
(Q4-2025)
|
% Change Since: -4.55%|
Next Earnings Date:Aug 14, 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 presents a stable financial performance with strengths in cash flow management and operational efficiency. The income statement reveals growth potential with opportunities to enhance net profitability. The balance sheet is solid with moderate leverage, though increasing equity would further strengthen financial resilience.
Income Statement
75
Positive
Lenovo Group's TTM revenue shows a positive growth trajectory compared to the previous annual period. The gross profit margin is strong at 16.3%, indicating efficient cost management. However, the net profit margin is relatively low at 2.3%, suggesting potential areas for improving profitability. Despite a decrease in annual revenue from the prior year, the company has maintained a stable EBIT margin of 3.5% and an EBITDA margin of 4.2% in the TTM period, reflecting consistent operational performance.
Balance Sheet
70
Positive
The debt-to-equity ratio is moderate at 0.79, indicating a balanced approach to leveraging debt. The equity ratio stands at 11.2%, showing a relatively low portion of assets funded by equity, which could be a risk factor. Return on equity is reasonable at 30.7%, reflecting effective use of shareholder funds to generate profit. Overall, the balance sheet displays stability but with room for strengthening equity financing.
Cash Flow
80
Positive
The company demonstrates robust cash flow management with a strong free cash flow to net income ratio of 1.25, indicating effective conversion of income into cash. Operating cash flow to net income is at 1.73, highlighting efficient operational cash generation. The free cash flow growth rate of 166.3% from the previous year depicts significant improvement in cash availability, enhancing the company's financial flexibility.
BreakdownTTMMar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income Statement
Total Revenue65.93B56.86B61.95B71.62B60.74B50.72B
Gross Profit10.74B9.80B10.50B12.05B9.77B8.36B
EBITDA2.79B3.54B3.80B4.29B3.10B2.25B
Net Income1.54B1.01B1.61B2.03B1.21B718.85M
Balance Sheet
Total Assets29.99B38.75B38.92B44.51B37.99B32.13B
Cash, Cash Equivalents and Short-Term Investments2.73B3.63B4.32B3.96B3.13B3.62B
Total Debt5.65B3.96B4.36B5.93B4.42B6.44B
Total Liabilities25.89B32.67B32.87B39.12B34.38B28.07B
Stockholders Equity4.39B5.58B5.59B4.99B3.56B4.19B
Cash Flow
Free Cash Flow1.93B725.09M1.22B2.79B2.81B1.26B
Operating Cash Flow2.67B2.01B2.80B4.08B3.65B2.21B
Investing Cash Flow-1.11B-1.28B-1.92B-1.50B-975.90M-956.95M
Financing Cash Flow-927.87M-1.34B-413.78M-1.76B-3.23B-238.49M

Lenovo Group Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price9.66
Price Trends
50DMA
9.31
Positive
100DMA
10.20
Negative
200DMA
10.00
Negative
Market Momentum
MACD
0.07
Negative
RSI
60.86
Neutral
STOCH
89.14
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0992, the sentiment is Neutral. The current price of 9.66 is above the 20-day moving average (MA) of 9.28, above the 50-day MA of 9.31, and below the 200-day MA of 10.00, indicating a neutral trend. The MACD of 0.07 indicates Negative momentum. The RSI at 60.86 is Neutral, neither overbought nor oversold. The STOCH value of 89.14 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:0992.

Lenovo Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$1.03T7.18
7.04%11.71%37.04%
70
Outperform
HK$119.83B10.9723.76%3.52%18.03%71.00%
65
Neutral
HK$75.26B25.6111.45%0.77%18.80%142.93%
58
Neutral
$5.46B-18.09%1.26%-24.30%-10350.00%
58
Neutral
HK$46.72B23.718.06%0.61%31.55%141.88%
57
Neutral
$1.15B27.35-27.06%10.34%10.83%-5.57%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:0992
Lenovo Group
9.66
-0.89
-8.44%
HK:2318
Ping An Insurance Company of China
50.05
17.00
51.42%
HK:2382
Sunny Optical Technology (Group) Co
68.90
26.13
61.09%
HK:2342
Comba Telecom Systems Holdings
1.79
1.10
159.42%
HK:2018
AAC Technologies Holdings
39.40
8.84
28.95%

Lenovo Group Corporate Events

Lenovo Group Schedules Board Meeting to Review Financials and Dividend
Apr 22, 2025

Lenovo Group Limited has announced a board meeting scheduled for May 22, 2025, where the board will consider approving the audited financial results for the fiscal year ending March 31, 2025. The meeting will also discuss the recommendation of a final dividend payment, which could impact the company’s financial strategy and shareholder returns.

Lenovo Announces Board of Directors and Their Roles
Apr 1, 2025

Lenovo Group Limited has announced the composition of its board of directors, including the roles and functions of each member. This announcement provides clarity on the governance structure of the company, which is crucial for stakeholders to understand the leadership dynamics and decision-making processes within Lenovo.

Lenovo Revises Annual Caps and Renews Agreements with Fujitsu
Feb 28, 2025

Lenovo Group Limited has announced revisions to its existing annual caps for continuing connected transactions with Fujitsu, reflecting the strong performance of FCCL’s business. Additionally, Lenovo has renewed its agreements with Fujitsu, extending the terms for the provision of services and products, while also entering into a new secondment agreement for employee transfers. These strategic moves are aimed at facilitating FCCL’s operations and maintaining beneficial partnerships, ensuring that the terms remain fair and reasonable for all stakeholders involved.

Lenovo Announces Major Board and Management Changes for 2025
Feb 21, 2025

Lenovo Group Limited announced significant changes in its board and management structure, effective in 2025. Several independent non-executive directors, including Mr. William O. Grabe and Mr. William Tudor Brown, will resign due to reaching the maximum term of service, leading to a reshuffle of committee memberships. Mr. Gordon Robert Halyburton Orr and Mr. John Lawson Thornton will take on new leadership roles within the board. Additionally, key management changes include the retirement of Mr. Wong Wai Ming as CFO and his replacement by Mr. Winston, Shao-Min Cheng, with Mr. Wong transitioning to a non-executive director role, along with Ms. Laura Green Quatela.

Lenovo Announces Board Composition and Governance Structure
Feb 21, 2025

Lenovo Group Limited announced the composition of its board of directors, detailing the roles and functions of each member. The board includes a mix of executive, non-executive, and independent non-executive directors, with Mr. Yang Yuanqing serving as Chairman and CEO. The company has structured its governance with three key committees: Audit, Compensation, and Nomination and Governance, each chaired by different board members. This announcement strengthens Lenovo’s governance framework, potentially enhancing strategic oversight and decision-making processes, which could impact its market positioning and stakeholder confidence.

Lenovo Reports Robust Q3 Growth Driven by AI and Strategic Investments
Feb 20, 2025

Lenovo Group reported strong financial results for FY2024/25 Q3, with a 106% increase in profit attributable to equity holders and a 20% rise in revenue. The company’s strategic focus on Hybrid AI, cloud demand, and operational excellence across its business groups drove significant growth, positioning Lenovo as a leader in AI solutions. Lenovo’s ISG, IDG, and SSG divisions all achieved notable revenue growth, with ISG benefiting from cloud demand and IDG expanding its PC and smartphone market share. The company’s focus on innovation, sustainability, and strategic global partnerships, such as with Alat, are expected to enhance its growth trajectory and market diversification, especially in the Middle East and Africa.

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: Apr 21, 2025