Lenovo Group (00992) significantly improves operational efficiency: inventory improvement of 6 days, reducing $2.2 billion in inventory.

On November 16, 2023, LENOVO GROUP (00992) announced its financial results for the second quarter of the 2023/24 fiscal year, ending September 30, 2023. The overall revenue reached 104.4 billion RMB, showing consecutive quarterly growth. The gross profit margin increased to 17.5% year-on-year, reaching a historic high for the second quarter. Non-PC businesses accounted for over 40% of the total, a nearly 3 percentage point increase compared to the previous year. LENOVO GROUP's Chief Financial Officer, Huang Weiming, stated that the company had improved its operational efficiency, with the cash turnover period improving to negative 4 days. The total accounts receivable and inventory days improved by 9 days compared to the same period last year, with inventory days alone improving by 6 days. At the same time, the company reduced inventory levels by $2.2 billion by quickly adjusting raw material inventory. The second quarter financing costs decreased by $7 million year-on-year, primarily due to the careful reduction of borrowing to offset higher benchmark interest rates. Additionally, Standard & Poor's upgraded the company's long-term credit rating to B, with a stable outlook, affirming the operational resilience of LENOVO GROUP and the effectiveness of its diversified growth engine strategy. Furthermore, the Smart Devices Business Group performed outstandingly, driving strong improvement in the company's revenue performance. The second quarter revenue increased by 12% compared to the previous quarter, surpassing the historical average of 8% since the establishment of the business division in the 2018/19 fiscal year.