Analyst Opinion: Lenovo Group’s non-PC business revenue rose 37%. The company is committed to doubling research and development (R&D) investment, increasing R&D by 10% per year, and expanding the R&D ecosystem by 29% per year.

Lenovo’s successful non-PC business demonstrates the company’s service innovation strategy through continuous investment in business diversification activities that lead to positive business results and future growth opportunities. In our view, Lenovo has succeeded in identifying new equipment in solutions and services, infrastructure solutions, and mobile business, all with double-digit annual revenue and strong overall growth, and in line with Lenovo’s commitment to double profits in the medium term…

Lenovo is committed to accelerating the smart and digital transformation, especially with the continuous hybrid work model and the strong and sustainable demand for smart devices/IoT, smart infrastructure, and smart applications and services, and seizing the opportunities. As a result, all new growth engines have generated double-digit annual growth (YTY), including:

  • Solutions and Services Group (SSG) – YTY growth of 23%: revenue in Q1 of 2023 is 1456,000 and Q1 2022 is 11.841,000.
  • Infrastructure Services Group (ISG) – up 14% year-on-year: sales of 20.68 million units in the first quarter of 2023 and 1835,000 units in the first quarter of 2022.
  • Mobile Infrastructure Group (MSG): 21% YTY growth: Q1 2023 revenue is 2175,000 units, Q1 2022 revenue is 1.797,000 units.

Lenovo Q1 2022-2023: The rise of SSG

For SSG, Lenovo has identified a significant opportunity to expand its fastest-growing $1 trillion IT services market. This mainly includes the growth of hybrid operations along with the increased demand for core and frontline services. We also believe that deploying digital workspace solutions requires hardware, infrastructure, and device management services. Meanwhile, the vertical solutions market, such as smart city, smart manufacturing, smart education, and smart manufacturing, is expected to grow at a double-digit CAGR by 2025.

In the first half of fiscal 2023, SSG had strong sales and growth, up 23% year-on-year. The operating profit margin is maintained at 23%. In particular, SSG achieved strong double-digit revenue growth across all segments. Revenue from software and hardware management services currently accounts for about half of SSG’s business.

Lenovo SSG prioritizes investments in software tools, platforms, and vertical solutions. This includes expanding the truScale portfolio to include digital workspace solutions, deploying hybrid/multi-cloud solutions, developing sustainable services, and expanding PCCW’s pipeline through strategic partnerships.

Lenovo ISG Q1 2022-2023: Record profit, flat profit improvement

For ISG, Lenovo provides an important opportunity to capitalize on the growth of the strong ICT infrastructure market. Lenovo expects the server market to grow at a double-digit CAGR by 2025, the infrastructure market to reach $41 billion by 2025, and the storage market to reach $36 billion by 2025.

Highlights of ISG 2022/23 Q1 results include:

  • ISG’s revenue surpassed $2 billion for the first time, up 14% from last year, and is now in the black for the third quarter in a row.
  • According to Lenovo, the server and storage, as well as the cloud provider segment achieved record revenues, all growing at a faster rate than the market.
  • Computer revenue almost doubled, and ISG business maintained its top spot in the Top500 list due to strong performance, adding that Lenovo systems use more Neptune water cooling technology.

Lenovo’s strategic goal is to become a complete infrastructure provider by investing more in stock and innovation.

Lenovo Group: 1Q 2022/23 Results

Lenovo Group (HKSE: 992) (ADR: LNVGY) today announced strong group first-quarter results, posting a ninth consecutive quarter of revenue and margin growth. Net income for the first quarter was $516 million, up 11% year-on-year, and $556 million (non-IFRS), up 35% year-on-year.[1] Revenue reached $17 billion, up 5% year-on-year at a constant exchange rate.


The trillion-dollar IT services market continues to grow strongly, and the growth in hybrid operations is driving demand for premium services and order fulfillment. Similarly, the expansion of digital workspace solutions is creating a demand for service as a service for devices, infrastructure, and workspace management. At the same time, markets for vertical solutions such as Smart Cities, Smart Manufacturing, Smart Education, and Smart Retail are expected to grow at a double-digit CAGR until 2025.

Key figures for Q1 2022/23:

  1. In the latest quarter, SSG reported strong profitability and strong growth, with revenue up 23% year on year. The operating margin is maintained at a high level of around 23%.
  2. Hardware-agnostic managed services and project and solution services revenues now account for nearly half of SSG’s business, with strong double-digit revenue growth across all segments.

sustainable development:

  • SSG continues to invest in software, platforms, and vertical solutions that can be replicated with Lenovo’s unique intellectual property, including further expanding its TruScale-as-a-Service portfolio into the broader digital workspace market.
  • SSG launches hybrid/multi-cloud solutions and continues to expand its portfolio of green products.

The strategic partnership with PCCW Solutions, announced in June 2022, will further expand SSG’s presence and capabilities to build a technology solutions business in the Asia Pacific.

Infrastructure Solutions Group (ISG): Record sales and sales growth in the fiscal year 2021/21


ISG continues to benefit from strong growth in the ICT infrastructure market. By 2025, the server market alone is expected to grow at a double-digit CAGR. The edge infrastructure market will exceed $41 billion by 2025, while the storage market will reach $36 billion over the same period.

Key figures for Q1 2022/23:

  • ISG’s revenue topped $2 billion for the first time, up 14% year-on-year, and is in positive territory for the third consecutive quarter.
  • Cloud service provider segments such as servers and storage are generating record revenues and both segments are well ahead of the market.
  • Edge computing revenue nearly doubled year-over-year, and in HPC, ISG maintained its top spot in the Top500 with the addition of Lenovo systems that use Neptune’s proprietary liquid cooling technology.

sustainable development:

  • ISG continues to invest in its comprehensive portfolio and innovation, especially in the field of peripherals, cloud computing, and services.
  • ISG continues to balance size and profitability to become one of the fastest-growing end-to-end infrastructure providers.
  • Intelligent Devices Group (IDG): market leader, driver of innovation, and diversification.

By bemaad

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