Signal of Lenovo Group's (00992) Q2 performance: PC recovery trend established, AI PC to embrace huge room for imagination.

On November 16, 2023, LENOVO GROUP announced its performance for the second quarter of the 2023/24 fiscal year ending September 30, 2023. The overall revenue reached 104.4 billion Chinese yuan, with consecutive quarterly growth. The gross profit margin increased to 17.5% compared to the previous year, reaching a new high for the second quarter. Non-PC businesses accounted for over 40%, with an increase of nearly 3 percentage points compared to the previous year. Among them, the revenue of the Intelligent Devices Group (IDG) was 83.43 billion Chinese yuan, maintaining resilient profitability with an operating profit margin of 7.4%, which is in a leading position in the industry. The second quarter's personal computer shipment volume held a market share of nearly 24% globally, maintaining its position as the global leader, with a quarter-on-quarter revenue growth of 13.6%. LENOVO GROUP stated that with the outbreak of generative artificial intelligence, as the most important productivity tool, the entire PC industry is experiencing its most disruptive innovation moment in 40 years. The AI PC prototype showcased by Lenovo at the 2023 Tech World event has attracted wide market attention. In previous demonstrations, Lenovo's AI PC has the ability to create personalized local knowledge bases, run personal large-scale models through model compression technology, achieve AI natural interaction, further enhance productivity, simplify workflow, and protect personal privacy and data security. Minsheng Securities released a research report stating that with the recovery of market demand and gradual reduction of inventory, the PC market adjustment is basically completed, and there is a hopeful trend of continued recovery in 4Q23. The landing of generative AI models in PC applications is expected to set off a wave of AI PCs. The first appearance of Lenovo's AI PC will propel personal computers into the AI era.