Yongxing Securities: AI becomes the core growth engine, maintains "buy" rating on Lenovo (00992)

Yongxing Securities released a research report stating that Lenovo (00992) Q2 performance exceeded market expectations, with AI becoming the core growth engine. The report is optimistic about the development potential of LENOVO GROUP to drive sustained performance growth through its hybrid artificial intelligence strategy, maintaining a "buy" rating. Specifically, looking at each business line: AIPC continued to drive performance growth in the IDG segment. The IDG Intelligent Device Business Group achieved revenue of 108.1 billion yuan, an increase of 12% year-on-year. In the second quarter, the personal computer business achieved a record market share of 25.6% globally, an increase of 1.8 percentage points year-on-year. The penetration rate of AI personal computers has now increased to 33% of total shipments, while consolidating its leading position in the global Windows AI personal computer market with a share of 31.1%. AI infrastructure drives performance improvement in the ISG segment. The ISG Infrastructure Solution Business Group achieved revenue of approximately 29.3 billion yuan in the second quarter of the 2025/26 fiscal year, a 24% year-on-year increase, with significant growth in AI infrastructure revenue. This was mainly due to the increasing demand for artificial intelligence infrastructure, the acquisition of new Communication Service Providers (CSP) customers, and the promotion of enterprise and small and medium-sized business (SMB) transformation. The operating loss of the company's ISG Infrastructure Solution Business Group in the second quarter reached $118 million, due to increased investment in AI capabilities to expand scale, accelerate enterprise and SMB business transformation, and expand the AI infrastructure product portfolio. High value-added services drive performance growth in the SSG segment. In the first half of the 2025/26 fiscal year, the SSG Solutions and Services Business Group achieved a 19% year-on-year revenue increase, with an operating profit margin rising to 22%, driving a 28% year-on-year increase in operating profit. Supported by high-end additional services, support service revenue achieved double-digit growth year-on-year. Hosting services and project and solution services accounted for 58.9% of revenue in the Solutions and Services Business Group.