Lenovo Group: Infrastructure still offsetting device headwinds

研报英文原文证据摘录

Lenovo Group: Infrastructure still offsetting device headwinds

but still see risks on

device slowdown and component cost pressure on margins relative to other areas in the AI supply

chain to keep us Neutral on the brands. We see IDG decelerating to +11% YoY in F1Q27 (Jun) and by

F2Q/F3Q declining mid-teens YoY for shipments and revenue slowing to flattish factoring in the price

hikes. The company targets to maintain IDG OpM around 7% although does face risks as memory

inflation rises and demand weakens following the pull-ins.

EVIDENCE Q226 prelim PC shipments came in at -1% QoQ, -4% YoY, slightly above our estimates as pull-ins

continue in H126 ahead of memory inflation, however most ODMs are still conservative on H2 and

guiding 2026 PC units down high-single-digits to low teens in 2026E. Customer pull-ins ahead of

component price hikes also boosted H126 ODM NB shipments above our estimates, which could

imply a front-loaded year (vs. 2H stronger seasonally) for NB units.

WHAT´S PRICED IN? We believe the stock at 12x UBS 2027E P/E is now just small discount to global peers at 13x and

balances the increased exposure to both general/AI servers opportunities with pressure in devices as

rising component costs slows down end market demand in 2H26 notably in low-mid end consumer

electronics. We believe the current valuation largely reflects AI strength, better sales scale, and higher

profit dollars. However, we see potential for further upside should AI demand and IDG profitability

exceed expectations, while remaining cautious on margin pressure at hardware brands as component

costs settle at a higher plateau, benefiting upstream CPU and memory suppliers.Please

Upside/Downside

Spectrum

Valuedrivers (FY28E) Revenue growth GM OpM EPS (US$)

HK$30.5 upside +11.7% 15.8% 4.8% 2.27