EB SECURITIES: HP, Lenovo, and Dell technology performance varies, AI server demand is growing strongly.

EB SECURITIES released a research report stating that HP (HPQ.US) FY1Q24 revenue decreased year-on-year, with personal systems business performance slightly underwhelming; HPE (HPE.US) FY1Q24 revenue also decreased year-on-year, with EPS exceeding the midpoint of guidance; server and hybrid cloud business revenue is expected to improve quarter by quarter; Dell Technologies (DELL.US) FY4Q24 performance exceeded market expectations, with strong growth in AI server business. The AI computing industry chain remains highly prosperous, and it is recommended to pay attention to: 1) Nvidia-related industry chains. AI chips: Nvidia (NVDA.US), Advanced Micro Devices Inc. (AMD.US), Intel Corporation (INTC.US); Servers: Super Micro Computer Inc. (SMCI.US), LENOVO GROUP (00992), Foxconn Industrial Internet (601138.SH); Cloud technology service providers: Oracle; Optical modules: Zhongji Innolight (300208.SZ), Eoptolink Technology Inc. (300502.SZ); HBM: Samsung Electronics (SSNLF.US), SK Hynix, Micron Technology Inc. (MU.US); Encapsulation testing: ASE Technology Holding Co., Ltd., Amkor Technology Inc.; 2) Domestic AI computing industry chains: Hygon Information Technology (688041.SH), Horizon Robotics (688256.SH), Inspur Electronic Information Industry (000977.SZ), Chengdu Hi-Tech Development (000628.SZ), RunJian Co., Ltd. (002929.SZ). Events: HP, HPE, and Dell Technologies released their 3-month performance reports for the period ending January 31, 2024 on February 28/29. HP FY1Q24 revenue decreased year-on-year, with slightly underwhelming performance in the personal systems business: HP FY1Q24 revenue was $13.2 billion, a decrease of 4.4% year-on-year; Non-GAAP diluted EPS was $0.81, within the company's guidance range of $0.76 to $0.86; GAAP diluted EPS was $0.62, within the company's guidance range of $0.60 to $0.70. FY1Q24 revenue for the personal systems business was $8.8 billion, a decrease of 4.1% year-on-year, with slightly underwhelming performance due to weak demand and unfavorable product mix; pre-tax profit margin (OP rate) was 6.1%, an increase of 0.9 percentage points year-on-year, due to lower commodity and logistics costs and cost optimization. Commercial/consumer PC revenue accounted for 69%/31% respectively, with revenue decreases of 5%/1% year-on-year, and shipment volumes increasing by 2%/10% year-on-year. The company expects FY2Q24 revenue for the personal systems business to decline by high single digits sequentially, in line with seasonal patterns; projecting low single-digit growth in the PC market in 2024. FY1Q24 printer revenue was $4.4 billion, a decrease of 5.1% year-on-year, due to weak demand, aggressive pricing, and market share loss. The company guided for FY2Q24 Non-GAAP diluted EPS of $0.76 to $0.86, and FY2Q24 GAAP diluted EPS of $0.58 to $0.68. HPE FY1Q24 revenue decreased year-on-year, with EPS exceeding the midpoint of the guidance range; server and hybrid cloud business revenue are expected to improve quarter by quarter: HPE FY1Q24 revenue was $6.8 billion, a 14% year-on-year decrease, due to weak demand for network products and GPU shortages for AI servers; Non-GAAP diluted EPS was $0.48, a 24% year-on-year decrease and 8% decrease sequentially, exceeding the company's mid-value guidance of $0.42 to $0.50; GAAP diluted EPS was $0.29, a 24% year-on-year decrease and 41% decrease sequentially, exceeding the company's mid-value guidance of $0.24 to $0.32. By business segment, FY1Q24 server business revenue was $3.4 billion, a 23% year-on-year decrease, with a pre-tax profit margin of 11.4%; intelligent edge business revenue was $1.2 billion, a 3% year-on-year increase, with a pre-tax profit margin of 29.4%; hybrid cloud business revenue was $1.2 billion, a 10% year-on-year decrease, with a pre-tax profit margin of 3.8%. The company's FY1Q24 cumulative accelerated processor orders rose to $4 billion, driven by HPE Cray EX and XT series solutions, and HPE ProLiant Gen11 AI servers. Based on strong demand for AI servers and improved GPU supply, the company expects revenue from servers and hybrid cloud business to improve quarter by quarter. The company guided for FY2Q24 revenue of $6.6-7.0 billion; Non-GAAP diluted EPS of $0.36-0.41; GAAP diluted EPS of $0.20-0.25. Dell Technologies FY4Q24 performance exceeded market expectations, with strong growth in AI server business: Dell Technologies FY4Q24 revenue was $22.3 billion, a 11% year-on-year decrease but flat sequentially; Non-GAAP net income was $1.61 billion, a 22% year-on-year increase and 16% sequential increase, exceeding Bloomberg's consensus expectation of approximately $1.247 billion by around 29%. By business segment, CSG business revenue was $11.7 billion, a 12% year-on-year decrease and 5% sequential decrease, with commercial/consumer PC revenue of $9.6/$2.2 billion; pre-tax profit margin was 6.2%, a 1.2 percentage point increase year-on-year; PC TRU (unit shipment revenue) was $1,220, nearly double that of the industry, and the gap has been widening since FY4Q19. Based on: 1) Windows 10 will stop receiving updates in 2025; 2) AI PCs driving replacement demand, the company expects further recovery in the global PC market in 2H24. ISG business revenue was $9.3 billion, a 6% year-on-year decrease and 10% sequential increase, with a pre-tax profit margin of 15.3%. Servers and networking revenue were $4.9 billion, with a split view.Traditional general server demand increased year-on-year, and has been increasing quarter-on-quarter for three consecutive quarters; AI server revenue reached 800 million US dollars, an increase of 40% quarter-on-quarter, accounting for 16.3% of ISG business revenue, with unfilled orders doubling to 2.9 billion US dollars. Storage revenue was 4.5 billion US dollars, up 16% quarter-on-quarter, with demand growing higher than normal seasonal patterns. The company expects FY25 revenue to be between 9.1 billion and 9.5 billion US dollars, with the following projections: 1) CSG business to grow in the low single digits; 2) ISG business to grow 15%-16% due to AI-driven, traditional general servers and storage returning to growth; Non-GAAP EPS for FY25 is expected to be between 7.25 and 7.75 US dollars, surpassing Bloomberg's consensus estimate of 7.19 US dollars.Je suis une tudiante en sciences politiques.