Damo: Maintaining Lenovo Group's (00992) “Accumulation” Rating Target Price of HK$46

The Zhitong Finance App learned that Morgan Stanley released a research report saying that Lenovo Group (00992) stated at the China BEST conference that ISG revenue will continue to accelerate, while demand for personal computers will slow down in the second half of 2026, and the net profit margin target will remain unchanged. The bank maintains Lenovo Group's “Overweight” rating, with a target price of HK$46.

According to the bank, Lenovo continues to see strong demand for general-purpose servers and AI servers. Cloud customers account for about 70% of revenue. Among them, Neocloud (Neocloud) also falls into this category, and enterprises and SMEs account for about 30%. With current forecasts unchanged, revenue for the second quarter of the 2027 fiscal year ending at the end of September this year will continue to accelerate year-on-year, and profit margins can remain flat on a quarterly basis; if AI demand is faster than expected, revenue growth will be stronger. Demand for enterprise general-purpose servers remains strong and will continue to drive profit margin expansion. Lenovo may enter the GB300 market later, but it is believed that the VR200 delivery time is in line with leading suppliers.

Management reiterated its belief that through continued cost reduction, IDG's operating profit margin would remain flat at about 7% quarterly for the second quarter of the 2027 fiscal year ending at the end of September. Management maintains a short-term net profit margin target of 5%, and the longer-term target is to increase it to 5% to 8%.