HK Stock Market Move | LENOVO GROUP (00992) rose more than 4% in the afternoon, with ISG's performance far exceeding expectations, likely leading to sequential improvements in profitability over the next few quarters.

LENOVO GROUP (00992) rose over 4% in the afternoon, and as of the time of writing, it was up 3.71%, trading at HKD 30.74, with a transaction volume of HKD 2.028 billion. In news, LENOVO GROUP recently released its results for the first fiscal quarter of FY 2026/27, which exceeded expectations, achieving record highs in both revenue and adjusted profit. Notably, the ISG business performed exceptionally well. In the first fiscal quarter, ISG revenue grew by 98% year-on-year, reaching a record 57.9 billion RMB; operational profit was approximately 5.3 billion RMB, with the operating profit margin rapidly increasing to 9.1%, officially becoming the new core engine of profit and growth for the group. Nomura released a research report stating that the operating profit margin of LENOVO GROUP's Infrastructure Solutions Group (ISG) performed strongly, far exceeding expectations, potentially driving quarter-on-quarter improvements in profitability for the coming seasons. They maintained a "Buy" rating, raising the target price from the previous HKD 35 to HKD 45. Citigroup also stated that the robust momentum of ISG opens up valuation space and reiterated their "Buy" rating for Lenovo.