Lenovo Group CFO expects memory inventory to be sufficient for use in the second half of the fiscal year and is confident in its pricing power

Under the global AI investment boom, there has been a shortage of memory supply, and it has been reported that many manufacturers have significantly raised prices for memory chips and other products. Zheng Xiaoming, Senior Vice President and Chief Financial Officer of Lenovo Group (00992.HK), stated that they have indeed seen an increase in raw material prices, but he is confident in the group's supply chain capabilities, having already deployed a safer inventory level in advance, with little change in inventory over the past few quarters. He also described that Lenovo will not "make all the money," and has built good relationships with major suppliers and signed long-term contracts to ensure stable raw material supply, admitting that the current inventory is completely sufficient for use in the second half of the fiscal year.

When asked whether the rise in memory prices would compress Lenovo's gross margin and create pricing pressure, he stated that the ability to secure raw material supply represents pricing power, and believes the group may have the potential to enhance product profit margins, but this will depend on actual market conditions, and he did not provide a positive response regarding whether future products will see price increases.

Lenovo's new regional headquarters in Riyadh, the capital of Saudi Arabia, officially broke ground last month. Zheng Xiaoming revealed that the progress is faster than expected, with plans to begin testing next month, and full production is expected to commence from mid to late next year, at which point it will supply markets in the Middle East, Africa, and Europe