Company trends
The current situation of the company
On September 1, we attended a special seminar on industrial metacosmos held by Lenovo Group Limited at the Lenovo Shanghai Future Center, and experienced Lenovo's technological layout and landing application in the field of meta-universe from three aspects: equipment, open platform and scheme. we jointly look forward to a new blueprint for the industry meta-universe.
Comment
Equipment: AR/VR equipment is the entrance of meta-universe; robot is the actuator of virtual and real interaction. According to the VR/AR global invention patent ranking TOP100 published by IPR daily from 2020 to 2021, Lenovo ranked 35th, and the number of VR/AR-related invention patents reached 687. For the consideration of the demand of industrial practice, the company mainly lays out AR direction, and its products include AR glasses, robots and so on. For example, the Morningstar Industrial Robot launched by the company last year is a third-generation intelligent robot based on visual intelligence technology and integrated with a variety of capability modules, which can be used with AR glasses and handles, and has been used in aircraft spraying of Comac.
Development platform: the tool is the supporting platform of meta-universe, while the algorithm mainly provides the understanding of space, objects and behavior. In 2021, Lenovo released the artificial intelligence platform-Lenovo brain, which solved three core problems: difficult model construction, small data samples and slow scene adaptation. In addition, facing the difficult problem of spatial location of feature maps, structural models and representation models in meta-universe scenes, the company set up a separate full-element map team this year and plans to develop a traditional 3D vision + deep learning technical solution to fully adapt to various XR meta-universe scenarios. We believe that through all-element + open platform, the company is expected to reduce the cost of building meta-universe.
Solution: AR+AI collaborates to create application scenarios such as manufacturing meta-universe and power meta-universe. In manufacturing meta-universe, the company creates a model of a virtual factory through meta-universe technology, such as the "Smart Eye" image recognition and early warning system jointly built by the company and Qingdao Special Steel, which can effectively identify and solve abnormal working conditions and other problems. In the electric meta-universe, the company goes deep into the texture of the meta-universe and carries out the interaction between deficiency and reality through the appearance of true twins and texture twins:
1) the XR emergency training system cooperated by the company and China Southern Power Grid can achieve low-cost, high-efficiency and high-security power emergency training in a virtual and real scenario, and won the first prize for global equipment management and technological innovation achievements in 2022. 2) the intelligent robot inspection project cooperated with Baoding Electric Power has the functions of independent inspection of equipment and overview of inspection information, which can improve production efficiency and reduce the risk of manual operation, and won the 2022 annuity patrol award. Lenovo's meta-universe blueprint is not limited to the industrial field, the company also plans to use meta-universe technology to empower smart cities, smart parks, smart offices and other scenarios, to output more digital transformation results. We believe that with the development of industry intelligence, the company is expected to become one of the benchmark enterprises to provide meta-universe ToB solutions with the brand value accumulated by its traditional PC business in the ToB market.
Profit forecast and valuation
We keep our profit forecasts for fiscal 2023 and fiscal 2024 unchanged. The current share price corresponds to a price-to-earnings ratio of 4.6 times earnings for 2023 Universe in fiscal year 2024. Maintain an outperform industry rating and a target price of HK $8.80, corresponding to 6.5 times the price-to-earnings ratio of 2023 and 5.3 times the price-to-earnings ratio of 2024, with 41 per cent upside from the current share price.
Risk.
The impact of chip shortage is higher than expected; the development of metacosmos-related technology is less than expected; and the epidemic affects product delivery.