Citi: Expects LENOVO GROUP (00992) to deliver solid performance in the second fiscal quarter, maintains "Buy" rating.

Citi issued a research report stating that it expects LENOVO GROUP (00992) to deliver another solid quarterly performance in the second fiscal quarter of FY2026/27 ending September, and maintains a "Buy" rating on LENOVO GROUP. The bank expects the quarterly performance to be mainly supported by continued strength in the ISG business, stable execution in the IDG business, and sustained double-digit expansion in the SSG business; it forecasts second-quarter revenue of US$27.1 billion, up 33% year-on-year and up 1% quarter-on-quarter, broadly in line with market expectations, and non-GAAP net profit of US$11.8 billion, 49% above market expectations. Citi noted that recent market concerns about highly leveraged AI infrastructure operators have triggered volatility in the AI supply chain, but LENOVO GROUP's direct exposure to high-risk new cloud customers remains limited, and coupled with robust risk control and comprehensive accounts receivable insurance, this can alleviate balance sheet concerns. The bank expects ISG to remain the main profit engine, with second-quarter revenue up 135% year-on-year and operating margin maintained at 9%.