Huatai Securities lowers Lenovo Group's target price to 14 yuan and continues to recommend "buy" as supply chain advantages help resist industry cycles

Huatai Securities published a report stating that Lenovo Group (00992.HK) is expected to generate revenue of USD 20.45 billion in the second quarter of the 2026 fiscal year, a year-on-year increase of 14.6%, exceeding market expectations by 1.7%; the non-GAAP net profit attributable to shareholders is expected to be USD 512 million, a year-on-year increase of 25.2%, surpassing the company's original median guidance by about 19%, benefiting from global hybrid AI demand; the company disclosed for the first time that the revenue share from AI-related businesses increased by 13 percentage points year-on-year to 30%.

The firm believes that compared to other PC or server manufacturers, Lenovo Group has significant advantages in shipment scale, procurement scale, and supply chain management capabilities, demonstrating strong resilience against industry cycles. Management stated at the earnings conference that due to long-term partnerships with suppliers, the profitability of the PC business in the next two quarters and next year is unlikely to be affected.

Huatai Securities has lowered Lenovo Group's target price from HKD 16 to HKD 14, maintaining a "Buy" rating