Lenovo Group (0992) AI Stock Analysis

• Market Cap: HK$119.83B
• Dividend Yield: 3.52%
• Average Volume (3M): 63.21M
• Price to Earnings (P/E): 11.0
• Beta (1Y): 1.09
• Revenue Growth: 18.03%
• EPS Growth: 71.00%
• Country: HK
• Employees: 69,500
• Sector: Technology
• Sector Strength: 87
• Industry: Computer Hardware
• EPS (TTM): 0.05
• Shares Outstanding: 12,404,659,000
• 10 Day Avg. Volume: 46,674,733
• 30 Day Avg. Volume: 63,206,933
• PEG Ratio: -0.48
• Price to Book (P/B): 2.44
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 11.17
• Enterprise Value/Market Cap: 0.11
• Enterprise Value/Revenue: 0.06
• Enterprise Value/Gross Profit: 1.27
• Enterprise Value/Ebitda: 1.16
• 1Y Price Target: HK$12.87
• Price Target Upside: 33.26% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 70 Outperform
• 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 Business Overview & Revenue Model

Company Description

Lenovo 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 Money

Lenovo 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 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

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

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

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.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	65.93B	56.86B	61.95B	71.62B	60.74B	50.72B
Gross Profit	10.74B	9.80B	10.50B	12.05B	9.77B	8.36B
EBITDA	2.79B	3.54B	3.80B	4.29B	3.10B	2.25B
Net Income	1.54B	1.01B	1.61B	2.03B	1.21B	718.85M
Balance Sheet
Total Assets	29.99B	38.75B	38.92B	44.51B	37.99B	32.13B
Cash, Cash Equivalents and Short-Term Investments	2.73B	3.63B	4.32B	3.96B	3.13B	3.62B
Total Debt	5.65B	3.96B	4.36B	5.93B	4.42B	6.44B
Total Liabilities	25.89B	32.67B	32.87B	39.12B	34.38B	28.07B
Stockholders Equity	4.39B	5.58B	5.59B	4.99B	3.56B	4.19B
Cash Flow
Free Cash Flow	1.93B	725.09M	1.22B	2.79B	2.81B	1.26B
Operating Cash Flow	2.67B	2.01B	2.80B	4.08B	3.65B	2.21B
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 Price: 9.66
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2318	79 Outperform	$1.03T	7.18		7.04%	11.71%	37.04%
0992	70 Outperform	HK$119.83B	10.97	23.76%	3.52%	18.03%	71.00%
2382	65 Neutral	HK$75.26B	25.61	11.45%	0.77%	18.80%	142.93%
2342	58 Neutral	$5.46B	―	-18.09%	1.26%	-24.30%	-10350.00%
2018	58 Neutral	HK$46.72B	23.71	8.06%	0.61%	31.55%	141.88%
Sector *	57 Neutral	$1.15B	27.35	-27.06%	10.34%	10.83%	-5.57%

Lenovo Group Corporate Events

Lenovo Group Schedules Board Meeting to Review Financials and Dividend

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

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

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

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

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

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.