Lenovo Group (SEHK:992) - Share price, News & Analysis

Q: What is the Fair Price of 992 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

992 (HK$5.37) is trading below our estimate of [[fair value]] (HK$24.42)

992 fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	2/6
Past Performance	6/6
Financial Health	5/6
Dividends	5/6

992 Stock Overview

Lenovo Group Limited, an investment holding company, develops, manufactures, and markets technology products and services.

Rewards

Trading at 78% below our estimate of its fair value

Earnings are forecast to grow 5.88% per year

Earnings grew by 49.7% over the past year

Pays a reliable dividend of 7.08%

Trading at good value vs. peer average Price-To-Earnings ratio

Trading at good value vs. industry average Price-To-Earnings ratio

Trading below our calculated fair Price-To-Earnings ratio

Risk Analysis

992 passed our risk checks.

Lenovo Group Competitors

Xiaomi

SEHK:1810

HK$218.0b

Legend Holdings

SEHK:3396

HK$16.0b

Readboy Education Holding

SEHK:2385

HK$2.3b

EVOC Intelligent Technology

SEHK:2308

HK$2.1b

Price History & Performance

Summary of all time highs, changes and price drops for Lenovo Group
Historical stock prices
Current Share Price	HK$5.37
52 Week High	HK$9.65
52 Week Low	HK$5.28
Beta	1.19
1 Month Change	-13.94%
3 Month Change	-25.52%
1 Year Change	-41.57%
3 Year Change	-1.29%
5 Year Change	22.88%
Change since IPO	1,007.22%

Recent News & Updates

Sep 21

Do Lenovo Group's (HKG:992) Earnings Warrant Your Attention?

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to...

Sep 08

Is Lenovo Group (HKG:992) Using Too Much Debt?

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' When we think about how risky a company...

Shareholder Returns

	992	HK Tech	HK Market
7D	-8.4%	-8.9%	-4.3%
1Y	-41.6%	-54.0%	-28.3%

Return vs Industry: 992 exceeded the Hong Kong Tech industry which returned -53.8% over the past year.

Return vs Market: 992 underperformed the Hong Kong Market which returned -28.8% over the past year.

Price Volatility

Is 992's price volatile compared to industry and market?
992 volatility
992 Average Weekly Movement	4.6%
Tech Industry Average Movement	5.1%
Market Average Movement	6.5%
10% most volatile stocks in HK Market	12.7%
10% least volatile stocks in HK Market	3.1%

Stable Share Price: 992 is not significantly more volatile than the rest of Hong Kong stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: 992's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1984	75,000	Yuanqing Yang	https://www.lenovo.com

Lenovo Group Limited, an investment holding company, develops, manufactures, and markets technology products and services. It operates through Intelligent Devices Group, Infrastructure Solutions Group, and Solutions and Services Group segments. The company offers commercial and consumer personal computers, as well as servers and workstations; and a family of mobile Internet devices, including tablets and smartphones.

Lenovo Group Fundamentals Summary

How do Lenovo Group's earnings and revenue compare to its market cap?
992 fundamental statistics
Market Cap	HK$65.13b
Earnings (TTM)	HK$16.32b
Revenue (TTM)	HK$562.41b

4.0x

P/E Ratio

0.1x

P/S Ratio

Is 992 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
992 income statement (TTM)
Revenue	US$71.64b
Cost of Revenue	US$59.55b
Gross Profit	US$12.09b
Other Expenses	US$10.01b
Earnings	US$2.08b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.17
Gross Margin	16.88%
Net Profit Margin	2.90%
Debt/Equity Ratio	61.8%

How did 992 perform over the long term?

See historical performance and comparison

Dividends

7.1%

Current Dividend Yield

27%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 992 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 992?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 992. This is calculated by dividing 992's market cap by their current preferred multiple.
What is 992's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$8.30b

992 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.1x
Enterprise Value/EBITDA	2.2x
PEG Ratio	0.7x

Price to Earnings Ratio vs Peers

How does 992's PE Ratio compare to its peers?

992 PE Ratio vs Peers

The above table shows the PE ratio for 992 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	65x
1810 Xiaomi	48.5x	44.2%	HK$218.0b
3396 Legend Holdings	8.5x	82.7%	HK$16.0b
2385 Readboy Education Holding	191.3x	n/a	HK$2.3b
2308 EVOC Intelligent Technology	11.7x	n/a	HK$2.1b
992 Lenovo Group	4x	5.9%	HK$65.1b

Price-To-Earnings vs Peers: 992 is good value based on its Price-To-Earnings Ratio (4x) compared to the peer average (65x).

Price to Earnings Ratio vs Industry

How does 992's PE Ratio compare vs other companies in the Asian Tech Industry?

Price-To-Earnings vs Industry: 992 is good value based on its Price-To-Earnings Ratio (4x) compared to the Asian Tech industry average (13.2x)

Price to Earnings Ratio vs Fair Ratio

What is 992's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

992 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	4x
Fair PE Ratio	9.4x

Price-To-Earnings vs Fair Ratio: 992 is good value based on its Price-To-Earnings Ratio (4x) compared to the estimated Fair Price-To-Earnings Ratio (9.4x).

Share Price vs Fair Value

What is the Fair Price of 992 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 992 (HK$5.37) is trading below our estimate of fair value (HK$24.42)

Significantly Below Fair Value: 992 is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

Discover undervalued companies

Future Growth

How is Lenovo Group forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

5.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 992's forecast earnings growth (5.9% per year) is above the savings rate (1.6%).

Earnings vs Market: 992's earnings (5.9% per year) are forecast to grow slower than the Hong Kong market (16.8% per year).

High Growth Earnings: 992's earnings are forecast to grow, but not significantly.

Revenue vs Market: 992's revenue (3.6% per year) is forecast to grow slower than the Hong Kong market (9.7% per year).

High Growth Revenue: 992's revenue (3.6% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 992's Return on Equity is forecast to be high in 3 years time (28.6%)

Discover growth companies

Past Performance

How has Lenovo Group performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

49.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 992 has high quality earnings.

Growing Profit Margin: 992's current net profit margins (2.9%) are higher than last year (2.2%).

Past Earnings Growth Analysis

Earnings Trend: 992's earnings have grown significantly by 49.3% per year over the past 5 years.

Accelerating Growth: 992's earnings growth over the past year (49.7%) exceeds its 5-year average (49.3% per year).

Earnings vs Industry: 992 earnings growth over the past year (49.7%) exceeded the Tech industry -11%.

Return on Equity

High ROE: 992's Return on Equity (39.4%) is considered high.

Discover strong past performing companies

Financial Health

How is Lenovo Group's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 992's short term assets ($29.1B) do not cover its short term liabilities ($33.0B).

Long Term Liabilities: 992's short term assets ($29.1B) exceed its long term liabilities ($5.7B).

Debt to Equity History and Analysis

Debt Level: 992 has more cash than its total debt.

Reducing Debt: 992's debt to equity ratio has reduced from 68% to 61.8% over the past 5 years.

Debt Coverage: 992's debt is well covered by operating cash flow (116.7%).

Interest Coverage: 992's interest payments on its debt are well covered by EBIT (17x coverage).

Balance Sheet

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Dividend

What is Lenovo Group current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

7.08%

Current Dividend Yield

Dividend Yield vs Market

Lenovo Group Dividend Yield vs Market

How does Lenovo Group dividend yield compare to the market?
Segment	Dividend Yield
Company (Lenovo Group)	7.1%
Market Bottom 25% (HK)	3.1%
Market Top 25% (HK)	9.0%
Industry Average (Tech)	3.6%
Analyst forecast in 3 Years (Lenovo Group)	8.9%

Notable Dividend: 992's dividend (7.08%) is higher than the bottom 25% of dividend payers in the Hong Kong market (3.01%).

High Dividend: 992's dividend (7.08%) is low compared to the top 25% of dividend payers in the Hong Kong market (8.95%).

Stability and Growth of Payments

Stable Dividend: 992's dividends per share have been stable in the past 10 years.

Growing Dividend: 992's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (27.2%), 992's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (22.3%), 992's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

5.9yrs

Average management tenure

CEO

Yuanqing Yang (57 yo)

24.83yrs

Tenure

US$27,292,000

Compensation

Mr. Yuanqing Yang has been the Chairman and Chief Executive Officer of Lenovo Group Limited since April 30, 2005 and February 5, 2009 respectively. Mr. Yang serves as Executive Director of Lenovo Group sin...

CEO Compensation Analysis

Yuanqing Yang's Compensation vs Lenovo Group Earnings

How has Yuanqing Yang's remuneration changed compared to Lenovo Group's earnings?
Date	Total Comp.	Salary	Company Earnings
Jun 30 2022	n/a	n/a	US$2b
Mar 31 2022	US$27m	US$1m	US$2b
Dec 31 2021	n/a	n/a	US$2b
Sep 30 2021	n/a	n/a	US$2b
Jun 30 2021	n/a	n/a	US$1b
Mar 31 2021	US$28m	US$1m	US$1b
Dec 31 2020	n/a	n/a	US$961m
Sep 30 2020	n/a	n/a	US$824m
Jun 30 2020	n/a	n/a	US$716m
Mar 31 2020	US$25m	US$1m	US$665m
Dec 31 2019	n/a	n/a	US$741m
Sep 30 2019	n/a	n/a	US$715m
Jun 30 2019	n/a	n/a	US$682m
Mar 31 2019	US$15m	US$1m	US$596m
Dec 31 2018	n/a	n/a	US$511m
Sep 30 2018	n/a	n/a	-US$11m
Jun 30 2018	n/a	n/a	-US$40m
Mar 31 2018	US$19m	US$1m	-US$189m
Dec 31 2017	n/a	n/a	-US$115m
Sep 30 2017	n/a	n/a	US$272m
Jun 30 2017	n/a	n/a	US$290m
Mar 31 2017	US$19m	US$1m	US$535m
Dec 31 2016	n/a	n/a	US$608m
Sep 30 2016	n/a	n/a	US$810m
Jun 30 2016	n/a	n/a	-US$60m
Mar 31 2016	US$23m	US$1m	-US$128m

Compensation vs Market: Yuanqing's total compensation ($USD27.29M) is above average for companies of similar size in the Hong Kong market ($USD731.00K).

Compensation vs Earnings: Yuanqing's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: 992's management team is seasoned and experienced (5.9 years average tenure).

Board Members

Experienced Board: 992's board of directors are considered experienced (8.8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: 992 insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

SEHK:992 Recent Insider Transactions by Companies or Individuals
Date	Value	Name	Entity	Shares	Max Price
26 Aug 22	BuyHK$63,071,838	JPMorgan Chase & Co, Private Banking and Investment Banking Investments	Company	9,225,889	HK$6.84
26 Aug 22	SellHK$2,582,720,892	JPMorgan Chase & Co, Private Banking and Investment Banking Investments	Company	377,789,790	HK$6.84
25 Aug 22	SellHK$611,332,356	JPMorgan Chase & Co, Private Banking and Investment Banking Investments	Company	91,110,351	HK$6.71
23 Aug 22	BuyHK$60,176,514	BlackRock, Inc.	Company	8,656,000	HK$6.95
19 Aug 22	BuyHK$1,548,319,285	JPMorgan Chase & Co, Private Banking and Investment Banking Investments	Company	216,772,412	HK$7.14
19 Aug 22	BuyHK$1,235,337	William Grabe	Individual	172,521	HK$7.16
19 Aug 22	BuyHK$357,166	Chih-Yuan Yang	Individual	49,880	HK$7.16
19 Aug 22	BuyHK$373,742	William Tudor Brown	Individual	52,195	HK$7.16
19 Aug 22	BuyHK$284,923	Gordon Robert-Halyburton Orr	Individual	39,791	HK$7.16
17 Aug 22	BuyHK$1,254,121,541	JPMorgan Chase & Co, Private Banking and Investment Banking Investments	Company	181,841,158	HK$6.90
22 Jul 22	BuyHK$21,724,239	BlackRock, Inc.	Company	2,956,000	HK$7.35
27 Jun 22	SellHK$5,608,216	Linan Zhu	Individual	735,986	HK$7.62
24 Jun 22	SellHK$1,071,402	Linan Zhu	Individual	145,769	HK$7.35
23 Jun 22	SellHK$1,047,960	Linan Zhu	Individual	142,000	HK$7.38
22 Jun 22	SellHK$1,638,676	Linan Zhu	Individual	224,169	HK$7.31
23 May 22	SellHK$21,209,905	BlackRock, Inc.	Company	2,699,766	HK$7.86
27 Apr 22	SellHK$13,410,120	BlackRock, Inc.	Company	1,844,000	HK$7.27
30 Mar 22	SellHK$30,505,002	Union Star Limited	Company	3,564,000	HK$8.56
22 Mar 22	SellHK$50,406,819	Right Lane Limited	Company	6,307,317	HK$7.99
28 Feb 22	SellHK$115,234,664	Union Star Limited	Company	13,200,000	HK$8.73
07 Jan 22	SellHK$30,671,659	Yuanqing Yang	Individual	3,456,000	HK$8.87
06 Jan 22	SellHK$40,735,783	Yuanqing Yang	Individual	4,590,000	HK$8.87
05 Jan 22	SellHK$66,816,955	Yuanqing Yang	Individual	7,354,000	HK$9.09
04 Jan 22	SellHK$23,235,428	Yuanqing Yang	Individual	2,600,000	HK$8.94
21 Dec 21	BuyHK$318,833	William Grabe	Individual	36,006	HK$8.85
21 Dec 21	BuyHK$93,119	Chih-Yuan Yang	Individual	10,516	HK$8.85
21 Dec 21	BuyHK$98,707	William Tudor Brown	Individual	11,147	HK$8.85
21 Dec 21	BuyHK$75,250	Gordon Robert-Halyburton Orr	Individual	8,498	HK$8.85

Ownership Breakdown

What is the ownership structure of 992?
Owner Type	Number of Shares	Ownership Percentage
Private Companies	719,304,248	5.9%
Individual Insiders	790,195,960	6.5%
Public Companies	2,867,636,724	23.6%
General Public	3,334,320,552	27.5%
Institutions	4,416,672,807	36.4%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Top Shareholders

Top 25 shareholders own 64.49% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
23.64%	Legend Holdings Corporation	2,867,636,724	$15.4b	0%	no data
6.34%	Yuanqing Yang	769,318,089	$4.1b	0.32%	no data
6.09%	Right Lane Limited	738,300,000	$4.0b	0%	no data
5.93%	Union Star Limited	719,304,248	$3.9b	0%	no data
5.03%	BlackRock, Inc.	609,905,064	$3.3b	0.23%	0.01%
4.88%	Goldman Sachs Group, Investment Banking and Securities Investments	592,388,956	$3.2b	0%	0.27%
2.26%	The Vanguard Group, Inc.	274,309,416	$1.5b	2.1%	no data
0.97%	Dimensional Fund Advisors LP	117,342,444	$630.1m	1.89%	0.02%
0.94%	Fidelity International Ltd	113,590,955	$610.0m	0.07%	0.04%
0.84%	China Asset Management Co., Ltd.	101,598,497	$545.6m	0.27%	0.16%
0.83%	State Street Global Advisors, Inc.	101,136,125	$543.1m	4.94%	no data
0.83%	Norges Bank Investment Management	100,780,756	$541.2m	0%	0.01%
0.76%	CSOP Asset Management Limited	92,481,641	$496.6m	5.84%	2.84%
0.75%	Lazard Asset Management LLC	90,692,000	$487.0m	7.13%	0.06%
0.69%	Eastspring Investments (Singapore) Limited	83,488,000	$448.3m	0%	0.29%
0.62%	Teachers Insurance and Annuity Association-College Retirement Equities Fund	75,727,731	$406.7m	-10.18%	0.02%
0.55%	Swedbank Robur Fonder AB	66,511,393	$357.2m	0%	0.07%
0.5%	Hang Seng Investment Management Limited	60,559,535	$325.2m	-1.26%	0.54%
0.35%	Geode Capital Management, LLC	42,333,017	$227.3m	3.59%	no data
0.34%	Value Partners Hong Kong Limited	41,460,000	$222.6m	0%	0.84%
0.29%	J.P. Morgan Asset Management, Inc.	34,858,000	$187.2m	-66.5%	no data
0.28%	Candriam Luxembourg S.A.	33,799,722	$181.5m	-2.06%	0.09%
0.28%	Carmignac Gestion S.A.	33,521,693	$180.0m	-0.32%	0.23%
0.25%	HSBC Global Asset Management (UK) Limited	30,197,557	$162.2m	1.3%	0.02%
0.25%	Acadian Asset Management LLC	30,068,692	$161.5m	0.1%	0.08%

Ticker	Exchange	Primary Security	Security Type	Country	Currency	Listed on
LNVG.F	OTCPK (Pink Sheets LLC)	Yes	Voting Ordinary Shares	US	USD	Feb 1994
992	SEHK (The Stock Exchange of Hong Kong Ltd.)	Yes	Voting Ordinary Shares	HK	HKD	Feb 1994
LHL	DB (Deutsche Boerse AG)	Yes	Voting Ordinary Shares	DE	EUR	Feb 1994
992	SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)	Yes	Voting Ordinary Shares	HK	HKD	Feb 1994
LEN	SWX (SIX Swiss Exchange)	Yes	Voting Ordinary Shares	CH	CHF	Feb 1994
992	SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)	Yes	Voting Ordinary Shares	HK	HKD	Feb 1994
LNVG.Y	OTCPK (Pink Sheets LLC)		SPONSORED ADR	US	USD	Apr 1995
LHL1	DB (Deutsche Boerse AG)		SPONSORED ADR	DE	EUR	Apr 1995
LHL1	BST (Boerse-Stuttgart)		SPONSORED ADR	DE	EUR	Apr 1995

Data	Last Updated (UTC time)
Company Analysis	2022/10/03 00:00
End of Day Share Price	2022/10/03 00:00
Earnings	2022/06/30
Annual Earnings	2022/03/31