The market share of the PC business continues to increase. Lyon maintains the outperform rating for LENOVO GROUP (00992) beating the market.

Recently, the internationally renowned investment bank, BNP Paribas, released a research report stating that after raising expectations on July 5th, they have further raised LENOVO GROUP's profit forecast for the months of April to June. This is due to the fact that Lenovo's PC business volume and profit margins exceeded previous expectations, and the server business revenue remained steady. Therefore, the target price for LENOVO GROUP has been raised from 11 Hong Kong dollars to 12 Hong Kong dollars, and the outperformance rating has been maintained. LENOVO GROUP's PC business is strong, with market share continuing to rise. BNP Paribas expects the Lenovo Identity Group's (IDG) revenue to grow by 14% from April to June (previously forecasted at 7%), mainly driven by demand in the US market due to tariff issues. They also predict that from July to September, the IDG business will continue to show growth with a 10% increase, mainly driven by demand in the Chinese market. Regionally, market share in the US, EU, and China has been increasing. According to IDC data, Lenovo's global PC shipments in the second quarter of 2025 reached 17 million units, a year-on-year increase of 15.3%, while the overall market growth was 7.5%. Lenovo's global market share in the second quarter of 2025 reached 24.6%, an increase of 0.8 percentage points quarter-on-quarter and 1.8 percentage points year-on-year. In the same quarter, Lenovo's market share in North America increased by 1.0 percentage points year-on-year to 18.7%, and in Western Europe, it increased by 0.6 percentage points year-on-year to 27.7%. Lenovo captured market share from Dell and HP in the US and EU markets, and from Huawei in the Chinese market. BNP Paribas expects the strong growth momentum of Lenovo's PC business to continue in the latter half of 2025, primarily benefiting from: 1) continued market share gains from competitors; 2) replacement demand generated by the end of support for Windows 10 in October; 3) the release of new AI models. In terms of AI PCs, Lenovo released a high-end AI PC model in June. Lenovo may also launch a new AI PC model based on Nvidia and MediaTek chipsets in early 2026. While prices have risen in the US market, demand has not been affected. Given the strong purchasing power of American consumers, the increase in retail prices does not seem to have impacted the sales of Lenovo personal computers in the US. Server revenue performance has been positive, with steady growth in the general server business. BNP Paribas predicts that Lenovo's server business revenue remained flat quarter-on-quarter at $4.1 billion from April to June, mainly driven by demand from cloud service providers. For July to September, they forecast further quarter-on-quarter growth in the server business, driven by increased demand from Microsoft and new US customers in Chinese data centers. Significant financial gains from warrants: The company issued 1.15 billion warrants on January 8, 2025. BNP Paribas estimates that the warrants will generate $120 million in revenue.