Upgrade Lenovo (00992) target price to 12.8 Hong Kong dollars. Lyon: Benefit from stable PC business, maintain "outperform the market" rating.

Recently, the internationally renowned bank, Credit Lyonnais, released a statement stating that they expect Lenovo (00992) to achieve a 13% year-on-year revenue growth and a 7% quarter-on-quarter growth in the second quarter of the fiscal year 2026 (FY2Q26), reaching 20.1 billion US dollars. This is higher than the previous estimate of an 11% year-on-year growth and is primarily driven by higher PC revenue. Lenovo's PC shipments increased by 17% year-on-year and 14% quarter-on-quarter. Due to its strong PC business, the target price has been raised to 12.8 Hong Kong dollars, maintaining an "outperform" rating. According to Credit Lyonnais's analysis: IDG revenue is expected to increase by 11% year-on-year to 15 billion US dollars, with an operating profit margin of 7.1%. ISG revenue is expected to increase by 20% year-on-year to 4 billion US dollars, with an improved operating profit margin. SSG revenue is expected to increase by 17%. Overall, Credit Lyonnais expects the adjusted net profit margin to improve both quarter-on-quarter and year-on-year to 2.2%, with a year-on-year growth of 14% to 436 million US dollars. Credit Lyonnais estimates a reported net profit of 260 million US dollars, including a non-cash fair value loss of 176 million US dollars and convertible bond interest.