LENOVO GROUP (00992) Achieves Several New Records in First Half of the Year. Net profit attributable to equity holders reached $602 million, an increase of 41% year-on-year.

date
15/11/2024
avatar
GMT Eight
Lenovo Group (00992) announced its performance for the six months ending on September 30, 2024. The revenue was $33.297 billion, an increase of 22% year-on-year; gross profit was $5.356 billion, an increase of 12% year-on-year; net profit attributable to equity holders of the company was $0.602 billion, an increase of 41% year-on-year; net profit attributable to equity holders of the company under non-Hong Kong financial reporting standards was $0.719 billion, an increase of 55% year-on-year; basic earnings per share were $0.0491, with an interim dividend of 0.085 Hong Kong dollars per share. The announcement stated that the group had set multiple new records in its performance during the period. The revenue of the three business groups achieved strong double-digit growth for the first time in three years. The group has been committed to building a full-stack artificial intelligence product portfolio, covering infrastructure, edge devices, and services, becoming a leading industry player in the paradigm shift of artificial intelligence. Research and development expenses for strengthening artificial intelligence increased by 8% year-on-year. Among them, the non-personal computer division accounted for 46% of the total revenue of the three business groups, reaching a new high and highlighting growth beyond the core personal computer business. The revenue of the Infrastructure Solutions Business Group increased by 65% year-on-year, reaching $6.5 billion for the first time in history. Cloud customers are investing in infrastructure to drive the application of artificial intelligence. According to the latest third-party research data, this growth, along with the recovery of enterprise business, has elevated the market position of the Infrastructure Solutions Business Group to fifth globally and third in China. The revenue of the Solutions and Services Business Group increased by 12% to $4 billion year-on-year, driven mainly by strong demand for "as-a-service" and artificial intelligence-driven solutions. The segment profit of the Solutions and Services Business Group accounted for 32% of the total segment profit of the three major business groups. The group continues to expand its base of recurring revenue, reaching a record deferred revenue of $3.1 billion. The Intelligent Devices Business Group has provided a comprehensive portfolio of artificial intelligence personal computer products for consumer and commercial sectors. The Intelligent Devices Business Group is investing in an active artificial intelligence application ecosystem and has developed personal artificial intelligence agents for different markets, becoming the core of these efforts. The revenue of the Intelligent Devices Business Group grew by 15%, with five major features, including personal artificial intelligence agent-equipped computers accounting for 14% of total shipments of notebooks in China in the second quarter and being the only geographic market to supply these new personal computers in large quantities. In the smartphone sector, driven by super high-speed growth in the Asia-Pacific region, Europe-Middle East-Africa, and North American markets, the revenue of the Intelligent Devices Business Group achieved high double-digit growth, with its market share expanding year-on-year for more than a year. Due to business recovery and improved profitability, free cash flow increased by $0.801 billion year-on-year in the first half of the year. Therefore, the net cash at the end of the period was $0.595 billion. The group's commitment to corporate governance and sustainable development has been well recognized, with the company maintaining an AA rating in the Hang Seng Sustainable Development Enterprise Index in 2024. In terms of environmental responsibility, the newly launched artificial intelligence consulting platform Lenovo Intelligent Sustainable Solutions Advisor (LISSA) was awarded the SEAL Sustainable Innovation Award, and its Neptune liquid cooling technology also won the BIG Sustainability Product of the Year Award. These milestones demonstrate the group's equal emphasis on sustainable development and excellence in strategy through diversified growth engines. The announcement stated that the group's shareholders had approved strategic business transactions, including issuing $2 billion in zero-coupon convertible bonds to Alat and 1.15 billion warrants. These transactions aim to raise funds to accelerate the group's growth and transformation plans. Alat's participation is expected to diversify the group's global supply chain and help expand the group's business in the Middle East and Africa.

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