In a report released today, Jim Hin Kwong Au from DBS maintained a Buy rating on Lenovo Group, with a price target of HK$20.00.
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Jim Hin Kwong Au has given his Buy rating due to a combination of factors that highlight Lenovo’s strategic positioning and growth potential. Lenovo is transitioning into a service-led company, leveraging its significant market share in the PC and server sectors to expand its services and solutions business. This shift is well-timed with the anticipated 2025 upgrade cycle, driven by the migration to Windows 11 and the introduction of a robust AI PC pipeline. The integration of AI technologies, such as the AI assistant ‘Xiaotian’, enhances Lenovo’s product offerings and positions it favorably for future growth.
Additionally, Lenovo is capitalizing on the booming AI infrastructure market in China, with its AI server revenue experiencing substantial growth. The company’s strong partnerships with major players like Alibaba and ByteDance, along with its innovative liquid-cooling systems, contribute to its competitive edge. These developments are expected to drive Lenovo’s profitability, particularly in the China server market, where it holds a significant share. The raised earnings forecasts and increased price target reflect the positive outlook on Lenovo’s ability to sustain and enhance its market position.
In another report released on November 11, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a HK$12.50 price target.