Macquarie: Maintains "outperform" rating on LENOVO GROUP (00992), raises target price to HKD 11.35.

"Morgan Stanley released a research report stating that it maintains a "outperform" rating for LENOVO GROUP (00992), raising its forecast for the company's operating profit for the current fiscal year to the 2026 fiscal year by 4% to 7%, as well as its forecast for net profit by 4% to 9%. Based on the confirmation of the business recovery cycle, the target price has been raised from HKD 9.06 to HKD 11.35. The bank predicts that with inventory cleared, the demand for device business in the current quarter will increase, and the service business will also increase by 15% compared to the same period. The operating profit margin is expected to increase by 0.3 percentage points to 4.4% on a quarterly basis, driven by the service business. For the next fiscal year, the bank expects revenue to increase by 6%, based on its forecast of a 2% increase in the personal computer business and a 5% increase in the enterprise server business. In addition, Morgan Stanley estimates that its service business will grow by 15% next year. With the improvement in the sales portfolio of personal computers and the growth of the service business, the forecasted operating profit margin will increase to 5.3%, or a 39% increase in operating profit compared to the previous year, indicating a recovery in operating profit to the level of the 2022 fiscal year."