LENOVO GROUP (00992.HK)'s adjusted net profit for the first fiscal quarter ended June spiked 176%. Chairman and CEO Yang Yuanqing said the group may achieve its USD100 billion revenue target ahead of schedule in this financial year with the goal to pursue even higher profit.

Lenovo CFO Winston Cheng said the group's medium-term net profit margin target is around 5%, while the long-term goal is to achieve 8% or above.

Yang said he does not see an AI bubble emerging and assumed AI demand will continue to grow. Demand growth for memory products is expected to continue at least until the end of next year. Lenovo is currently in a favorable position to adjust early-stage pricing in a timely manner when raw material costs rise.

Although the market believes the group's strong earnings growth is mainly propelled by AI demand, AI business currently accounts for only a small portion of the group's operations, with traditional computing still remaining the core business, he added.

The group's current server order backlog exceeds USD50 billion, while the amount that can ultimately be converted into orders will depend on supply chain capabilities, Yang said.

Yang added the group is cooperating with NVIDIA Corporation (NVDA.US) and plans to launch consumer AI PC products equipped with RTX series chips later this year.
~

AASTOCKS Financial News
Website: www.aastocks.com

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