报告名称：Lenovo Group Ltd(00992.HK)Stronger recovery for core profit several macro headwi
报告类型：港股研究
报告日期：2016-02-04
研究机构：德意志银行
股票名称：联想集团
股票代码：00992
页数：17
简介：GAAP operating and net income reach all-time highs
Although the Street was concerned about Lenovo’s (a) smartphone operational risks, (b) sustainable synergy for cost saving (US$1.35bn p.a.), and (c) negative currency impact on P&L, its solid Q3FY16 results (operating and net income beat consensus estimates by 16% and 24%), earlier turnaround of its mobile business and ongoing market share gains for PC/server products should ease investors’ too bearish outlook and help support the share price. However, to reflect potentially slower global demand improvement, we lower our target P/E multiple from 16x to 13x and roll over our valuation to FY17E EPS (from 12- month forward EPS) with a HK$10.2 (from HK$10) target price; reiterating Buy.
Progress of smartphone integration is the key for its share price
At the Q3FY16 results call meeting (3 February), most investors were interested in Lenovo’s strategies, sustainable profit and possible risks for its mobile business. Chairman Yang Yuanqing was confident that this business would remain profitable for the next 12 months. While he gave detailed plans for growing in emerging markets (improving scale, efficiency) and mature countries (innovative design, strong brand), we are positive on his highlighting growth resumption in China soon. In our P&L model, even though we assume only break-even for smartphone profits, our FY16/17E EPS are already 28/15% above consensus forecasts. This implies that the Street likely underestimates Lenovo’s solid execution and rising profits for its PC and server businesses.
Q3FY16 performance review
Revenue (US$12.9bn, +6% QoQ) missed expectations by 2-6% given tight inventory control and the impact of the stronger US dollar (6% sales impact). Better shipments of smartphone (20.2m units, +7% QoQ) and tablets (3.2m units, +4% QoQ) helped compensate for slower PC sales (15.4m units, +3% QoQ). With a significant increase in pre-tax margins in Pan America, Europe regions (Figure 2) and the mobile and enterprise segments (Figure 5), Q3FY16 OPM and net margin rose from 2.3% and 1.8% in Q3FY15 to 2.9% and 2.3%, above Street assumptions (2.5% and 1.8%, respectively). We are also positive on the lower net debt in Q3FY16 of NT$49m (from US$140m in Q2FY16).
Valuation and risks (see also pages 8 and 9)
Our new target P/E multiple (13x) for the valuation is lower than its historical average P/E (16x) since 2009. Downside risks: weaker demand and inventory.

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