Zhitong Financial APP learned that on February 22, 2024, Lenovo Group (00992), a leading enterprise in China's digital economy, announced its results for the third quarter of fiscal year 2023 24 as of December 31, 2023, with revenue of 113.6 billion yuan, a year-on-year increase of 3%; Net profit was nearly RMB2.6 billion, and profitability improved quarter-on-quarter for two consecutive quarters.
As the PC industry destocking comes to an end, the Group's core business, the personal computer business, is returning to the growth track: shipments in the global PC market fell by 2% year-on-year during the same periodIn the context of 7%, the Group significantly outpaced the market growth rate (5.).8PTS) further strengthened the position of PC as the world's number one, the highest since the pandemic.
The smart devices business other than PCs also achieved high growth. Sales of smartphones and tablets have far exceeded the average market growth rate by more than 20 percentage points. Smartphones performed particularly strongly in Asia Pacific, EMEA (Europe + Middle East + Africa) and North America, outperforming market growth by one percentage point, respectively.
The effectiveness of the intelligent transformation strategy that has been cultivated for many years continues to deepen. In the quarter, non-PC businesses accounted for 42% of the Group's total revenue. The SSG Solution Services business group continued to maintain double-digit year-on-year growth, exceeding the RMB14 billion mark for the first time, a record high, and an operating margin of over 20%.
ISG's Infrastructure Solutions Group revenue grew sequentially for the second consecutive quarter, with storage, software and services combined revenue reaching a record RMB7.4 billion. Edge computing revenue grew 12% year-over-year, marking the 11th consecutive quarter of growth. In the storage and AI infrastructure markets, Lenovo has firmly maintained its position as the world's No. 3 market.
At present, the global storm of generative AI is ushering in a critical period of application. Over the years, Lenovo Group has embraced AI in all aspects, built computing power from the pocket to the cloud, and already has a panoramic AI layout including AI-enabled, AI-oriented and AI-optimized terminals, infrastructure, solutions and services, and will rely on unique advantages to lead the transformation of hybrid AI.
While the global economy is still facing headwinds, we are already experiencing the revolutionary impact of AI technology and its applications. Yang Yuanqing, Chairman and CEO of Lenovo Group, said: "Lenovo is fully prepared for this, and is firmly grasping the huge growth opportunities in the AI era by continuously investing in AI technology innovation and deepening cooperation with other leading manufacturers in the field of AI." ”
Performance highlights: Revenue in the third quarter was 113.6 billion yuan, a year-on-year increase of 3%, net profit was nearly 2.6 billion yuan, and profitability increased quarter-on-quarter for two consecutive quarters.
Non-PC business accounted for 42%.
IDG's revenue was 89.3 billion yuan, returning to the growth track, and the market share of PC shipments was nearly 24%, the highest since the epidemic. Diversification continued to accelerate, with smartphone and tablet sales both returning to double-digit growth.
SSG's revenue reached a record high of RMB14.6 billion, with an operating margin of more than 20%.
ISG's revenue was 17.9 billion yuan, and the combined revenue of storage, software and services reached a record 7.4 billion yuan, and edge computing has maintained growth for 11 consecutive quarters.
IDG: Resume growth and outperform the market.
According to IDC statistics, in the fourth quarter of 2023, global traditional computer shipments fell by 27%, but the market contraction has bottomed out and the growth prospects are promising. For the much-talked-about AI PC products, Canalys is the first to say, the advent of AI PCs is expected to revive the market and change the user experience, which can be described as a watershed moment in the industry. This watershed moment has great potential and ushers in a new era of innovation through the use of AI. At the same time, the smartphone market has further shown signs of stabilization and recovery. In the fourth quarter of 2023, the global smartphone market grew by 8% to 3200 million units, ending seven consecutive quarters of decline. In the long run, the smartphone market will gradually recover to pre-pandemic levels.
In the third fiscal quarter, thanks to a clear strategy and operational excellence, IDG's smart devices business group returned to the growth track, with revenue of 89.3 billion yuan, a year-on-year increase of 6.%.7%。Among them, personal computers exceeded the market average growth rate by 5The 8 percentage point result consolidates the position of the world's No. 1 position, with a market share of nearly 24%. The North American market performed particularly well, with PC revenue up 20% year-over-year.
Diversified businesses other than PCs also performed strongly. The tablet business exceeded expectations, with shipments up 13% year-on-year, 30 percentage points faster than the market average.
The smartphone business continues to soar. Thanks to the strong execution of the three-year growth plan, smartphones performed strongly in Asia Pacific, EMEA and North America, outperforming the market by one percentage point respectively. Driven by the sales of the Motorola RAZR, the proportion of high-end products reached a record 25%.
Looking ahead, the trend of hybrid AI will drive a significant increase in the demand for AI terminal devices, accelerate the arrival of a new round of replacement cycles, and will open up more growth space for Lenovo to help continue to improve its profitability.
SSG: Achieving Milestone Achievements and Building Hybrid AI Services.
As global macroeconomic pressures have led CIOs to be cautious about IT spending, Gartner has lowered its 2024 annual growth rate for IT services to 87%, while medium-term growth remains relatively stable, with a compound growth rate of 112%。
In the third quarter, SSG Solution Services Group achieved milestone results of RMB14.6 billion, up 10% year-on-year, with an operating margin of 20.4%, revenue and operating profit both hit new highs. Among them, the operation and maintenance services and project and solution services business accounted for 55% of the overall revenue of SSG, achieving a year-on-year increase for 11 consecutive quarters. Digital workplace solutions grew 50% year-over-year, hybrid cloud services increased 86% year-over-year, and sustainable solutions increased 44% year-over-year.
Looking ahead, enterprise demand for hybrid AI solutions will remain strong. Hybrid AI solutions leverage a common AI foundation model, but are often deployed on private or hybrid infrastructure to ensure security, which tends to be complex and will create a constant demand for IT services, including consulting, implementation, and maintenance services for hybrid AI. At the same time, AI computing resources are shifting from training AI models to inference, requiring a more balanced infrastructure between the client, the edge, and the cloud. Lenovo AI Professional Services will help customers build the best AI strategy in times of rapid change. The panoramic AI capability "from pocket to cloud" will also be Lenovo's unique advantage in providing enterprise-level AI services and solutions.
In the first half of this year, Lenovo plans to launch Care-of-One, Intelligent Sustainability Solution Advisor (Li.s.s.a), Cybersecurity-as-a-Service (Craas) and other AI solutions that meet customer needs. In addition, Lenovo is working closely with NVIDIA to provide AI professional services to help customers rapidly deploy hybrid AI solutions.
ISG: Continued Improvement in Performance Building a Hybrid AI Infrastructure.
Despite market headwinds, the global server market is expected to grow at a CAGR of 10% in the medium to long term, reaching $150 billion by 2026. The growth rate of AI servers will be twice the growth rate of the overall server market. The edge infrastructure market will grow at a compound annual growth rate of 23%.
In the fiscal third quarter, ISG's Infrastructure Solutions Group revenue increased sequentially for the second consecutive quarter. Computing and storage demand grew due to strong demand from leading cloud vendors and emerging customers, with combined revenues for storage, software and services reaching a record RMB7.4 billion. Edge computing revenue grew 12% year-over-year, marking the 11th consecutive quarter of growth. In the storage and AI infrastructure markets, Lenovo has firmly maintained its position as the world's No. 3 market. In terms of high-performance computing, Lenovo continues to rank first in the global TOP500 and GREEN100.
Globally, Lenovo has established a comprehensive product line, including AI edge products that support large model inference, AI servers and storage that support large model training, inference, training and pushing, and high-performance computing. At the same time, it has the ability to build an intelligent computing center with self-research and service capabilities. Lenovo's heterogeneous intelligent computing platform can match the optimal computing infrastructure according to customers' needs for computing power of different scales, and pool and optimize the overall computing power.
Recently, the first "Wensheng**" large model Sora released by OpenAI has once again detonated the global demand for AI computing power. Lenovo is working extensively with the world's leading AI computing ecosystem companies to build diversified products and solutions, from ultra-large-scale training to edge inference and other business areas, to meet the needs of emerging businesses such as industry and enterprise large models.
This article is from: Zhitong Financial Network.