Event: 2022H1, the company realized operating income of 237.7 billion yuan (YoY+4%), net profit of 2.1 billion yuan (YoY-55%) and EPS of 0.91 yuan (YoY-55%).
Core focus: 1) H1 net profit is-55% year-on-year, mainly dragged down by the market environment, with an investment loss of 1.2 billion yuan. 2) the operating efficiency of the industry has been improved, the overall net profit of the sector is + 20% compared with the same period last year, and the net profit of Lenovo Group Limited is + 28% compared with the same period last year. 3) continue to focus on the real economy, with nearly 50 new investment technology enterprises in the first half of the year. As of August 15 this year, a total of 12 invested enterprises have been promoted to the capital market, and 45 have been selected into the fourth batch of new list of specialists.
Industrial operations have continued to deepen and profitability has been improved. The industrial operation section of 22H1 Company achieved an income of 235.8 billion yuan (YoY+4%) and a net profit of 2.8 billion yuan (YoY+20%). The income / assets / net profit accounted for 99% of the company's overall revenue, 81% and 133%, respectively. Among them, 1) Lenovo Group Limited realized income from + 3% to 218 billion yuan compared with the same period last year, and the net profit from home was + 28% to 2 billion yuan compared with the same period last year, supporting the overall performance of the sector. it is mainly due to the solid global leading position of its personal computer business and the new contribution of other businesses (Q2 accounts for 37% of the revenue). 2) Lianhong Group achieved revenue of + 15% to 4.5 billion yuan and net profit of-4% to 300 million yuan, which is expected to be mainly due to the impact of EVA parking on Q1 profits, but Q2 benefited from strong demand in the photovoltaic industry. Lianhong Xinke net profit margin improved to 349 million yuan (year-on-year + 78 million yuan). 3) Jiawo Group benefited from the expansion of fruit business and the rise in salmon prices, with revenue of + 15% compared with the same period last year, but its net profit was-23% compared with the same period last year, mainly due to the higher base in the same period last year due to the benefit of 21H1's equity reduction. 4) the income / homing net profit of the International Bank of Luxembourg is-8% and 36% respectively compared with the same period last year, and the overall performance is sound.
Industrial incubation is advancing steadily, and market shocks are a drag on investment performance. The industry incubation and investment sector of 22H1 achieved an income of 1.9 billion yuan (YoY+4%) and a net profit loss of 3 million yuan, mainly affected by the intensification of fluctuations in the capital market in the first half of the year. Among them, Junlian Capital AUM exceeded 69.1 billion yuan, completed 26 new project investment and 4 managed enterprises listed in the first half of the year, Lenovo Star AUM exceeded 4.3 billion yuan, completed 20 new project investment, 40 + managed project next round financing, and nearly 10 projects withdrew in the first half of the year. In addition, up to now, a total of 84 companies have been selected to specialize in special new enterprises, of which Fuhanwei's market share has increased significantly.
Investment advice: maintain a buy-An investment rating. We believe that the short-term performance fluctuation of Lenovo Holdings is mainly affected by market shocks, which is an important beneficiary of the approaching comprehensive registration system and the expansion of the Northern Stock Exchange, relying on the abundant industrial resources of the Chinese Academy of Sciences and excellent industrial operation performance; the industrial investment layout continues to focus on industry, and is expected to benefit from the comprehensive registration system reform to usher in the investment harvest period. We estimate that the EPS of Lenovo Holdings from 2022 to 2024 will be 1.76,2.35,2.49 yuan respectively, with a target price of HK $10.4, corresponding to 5 times 2022 Pmax E (converted exchange rate).
Risk hint: capital market volatility / business uncertainty / policy is not as expected