Lenovo Group Limited (0992): ISG upside outweighs PC uncertainty; u/g to OW

Research evidence excerpt

Lenovo Group Limited (0992): ISG upside outweighs PC uncertainty; u/g to OW

Asia Pacific Equity Research

28 July 2026

▲Overweight

Lenovo Group Limited (0992) Previous:0992.HK, Neutral992 HK

Price (27 Jul 26): HK$24.32

ISG upside outweighs PC uncertainty; u/g to OW

▲ Price Target (Jun-27): HK$30.00

Prior (Mar-27): HK$20.00

We are upgrading Lenovo to OW with a Jun-27 PT of HK$30 (based on 16x China

12-month forward diluted EPS), driven by strong server profitability Technology - Hardware

improvement, better-than-feared IDG price elasticity, and consolidation AC Albert Hung

tailwinds amid tight component supply. Lenovo stock is up 85% (vs. the HSI (886-2) 2725-9875

index at flat) following a solid Mar-quarter print on May 21. We expect a albert.hung@jpmchase.com

constructive share-price reaction into the Jun-quarter results, with upside J.P. Morgan Securities (Taiwan) Limited/ J.P.

primarily driven by the server segments. Our industry research suggests Morgan Securities (Asia Pacific) Limited/ J.P.

Morgan Broking (Hong Kong) Limited

Lenovo is seeing fast-growing AI-related client traction and healthy server

Gokul Hariharan ACprofitability supported by favorable pricing. As a result, we expect further ISG

(852) 2800-8564

margin expansion over the coming quarters on operating leverage. While PC gokul.hariharan@jpmorgan.com

earnings visibility remains uncertain, we believe Lenovo should outperform J.P. Morgan Securities (Asia Pacific) Limited/ J.P.

PC peers given its industry leadership and scale advantages. Key downside Morgan Broking (Hong Kong) Limited

risks include a potential slowdown in AI capex investment in 2027 and a Anthony Leng

larger-than-expected margin headwind from rising component costs. (886-2) 2725-9240

anthony.leng@jpmorgan.com