Recently, HTSC's research team led by Huang Leping released a research report stating that with strong demand driven by global hybrid artificial intelligence development, the company is expected to continue benefiting from AI-driven product demand growth in the second half of the year. The firm maintains a "Buy" rating for LENOVO GROUP (00992) with a target price of HK$16, corresponding to 15x FY2026E PE.
The research report provides detailed analysis as follows:
**Motorola Mobile Business Achieves Global Breakthrough with Foldable Screen Global Market Share Doubling**
In 2Q CY25, Motorola's global foldable phone market share increased to 28%, up 14 percentage points year-over-year, surpassing Samsung to become the world's largest foldable phone manufacturer. During the company's investor call, management disclosed that Moto brand smartphone revenue grew 14.0% year-over-year, with sales volumes outpacing market growth for eight consecutive quarters. Market share outside China reached a record high, with particularly strong growth in emerging markets.
Specifically: 1) Outstanding performance in the US premium market: The Motorola razr series, with its base model retail price of $699, became the most cost-effective foldable phone in the US market, driving US foldable phone shipments to their highest level in the same period historically; 2) Equally strong growth in emerging markets such as India: The razr 60 series vertical foldable phones showed robust demand in India and other overseas markets.
2Q CY25 marked an important turning point for the global foldable screen market, with Motorola's impressive performance fully demonstrating the company's strength in product innovation and market insights.
**AI PC Penetration Rapidly Increasing, Hybrid AI Becoming New Growth Driver**
In the AI PC business segment, hybrid AI solutions continue to serve as an important growth driver. According to IDC data, the company's global PC market share reached a record high of 24.6% in 2Q CY25, and this market share advantage may continue to expand. During the investor call, the company indicated that AI PC market penetration has reached approximately 30%, while user activity levels remain strong, with users purchasing AI applications showing activity rates of about 40%. As AI technology continues to mature and user acceptance improves, we expect AI application penetration rates to further increase, potentially continuing to drive structural upgrades in the company's PC products and improved profitability.
**"China+N" Global Layout Highlights Flexible Production Capabilities, Saudi Investment Opens New Middle East Opportunities**
Regarding global supply chain layout: 1) Lenovo's unique "China+N" globalized manufacturing layout, with China as its headquarters, demonstrates significant advantages in the current trade environment. According to earnings call disclosures, based on the "China+N" manufacturing layout, the company operates over 30 manufacturing bases globally, including owned factories in 11 countries, combining resilience and agility. When facing external environmental uncertainties, Lenovo can leverage the advantages of its "global resources, local delivery" operating model, such as through localized production in Mexico and Hungary, effectively managing risks and ensuring delivery efficiency.
2) Additionally, Lenovo has completed a $2 billion zero-coupon convertible bond investment with Alat, a company under Saudi Arabia's Public Investment Fund (PIF), and is establishing a production base in Saudi Arabia, expected to begin operations in 2026. This is expected to enable deep participation in AI infrastructure and digital economy construction under Saudi Arabia's "Vision 2030" national strategy.