Citigroup: Lenovo Group (00992) is expected to perform steadily in the second fiscal quarter and maintain a “buy” rating

The Zhitong Finance App learned that Citi released a research report saying that it is expected that Lenovo Group (00992) will once again hand over steady quarterly performance in the second fiscal quarter of the 2026/27 fiscal quarter ending at the end of September to maintain Lenovo Group's “buy” rating.

The bank expects that quarterly performance will be mainly supported by continued strong ISG business, stable execution of IDG business, and maintenance of double-digit expansion of SSG business; it also predicts revenue of US$27.1 billion for the second fiscal quarter, up 33% year-on-year and 1% quarter-on-quarter, which is roughly in line with market expectations. Non-GAAP net profit of US$1.18 billion is 49% higher than market expectations.

Citi pointed out that recent market concerns about highly leveraged AI infrastructure operators have caused fluctuations in the AI supply chain, but Lenovo Group's direct exposure to high-risk new cloud customers is still limited. Coupled with sound risk control and comprehensive accounts receivable insurance, it can ease balance sheet concerns. The bank expects ISG to continue to be the main profit engine. Revenue for the second fiscal quarter increased 135% year over year, and operating profit margin remained at 9%.