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<Research> G Sachs Raises LENOVO GROUP (00992.HK) TP to HKD27, Rating Buy
Recommend 16 Positive 21 Negative 7 |
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G Sachs said in a report that LENOVO GROUP (00992.HK) delivered strong quarterly results for the quarter ended end-March, reinforcing its positive view that the impact of rising memory costs is manageable. As a global PC leader, LENOVO GROUP has strong bargaining power over both customers and suppliers, while benefiting from market share expansion and rising average selling prices. Last quarter, LENOVO's PC shipments increased 8.6% YoY, outperforming the global industrys 2.5% YoY growth, with global PC market share expanding to 25.2%. The report noted that LENOVO continues to expand in the AI server segment. The average selling price of its servers priced above USD250,000 rose significantly from approximately USD576,000 in the second fiscal quarter ended end-September last year to USD1.4 million in the latest quarter, reflecting its transition toward high-end AI training servers. The Group currently has annual production capacity of 11,000 liquid-cooled AI server racks and plans to begin deliveries of its next-generation RubinAI server racks in 2H26. In the storage business, LENOVO completed the acquisition of Infinidat in April 2026, further strengthening its position in the high-end enterprise storage market. G Sachs expects LENOVOs storage revenue to record a CAGR of 25% between FY2026 and FY2028. It forecasts that by 2028, the ISG segments contribution to total revenue will increase to 35% from 23% in 2025. The broker raised its market share forecasts for LENOVOs server and storage businesses, expecting global server market share to reach 8% and storage to reach 9% by 2028. Although gross margin in FY2028FY2029 may face slight pressure due to competition in consumer electronics and a shift toward high-end models that require expensive GPU costs, overall operating efficiency improvements are expected to offset part of the impact. G Sachs believes AI will continue to drive LENOVOs future growth. It raised its FY2027FY2029 non-HKFRS earnings forecasts by 5%, 6% and 5%, respectively, and sharply lifted the TP from HKD12.53 to HKD27, maintaining a Buy rating. (da/a) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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