Initiate BUY: Lenovo Group Limited (992.HK)
​AMC Wanhai initiates with Buy on Lenovo Group Limited (992.HK) with a target price of HKD 5.8.
We are optimistic that the company is on the right track as it transforms its business and develops new growth drivers. The company continues to gain traction in the mobile and enterprise businesses, while maintaining its market superiority in the PC industry. The changes in the company will be enabled by solid bedrock provided by its PC business which will continue to support the company’s mobile and enterprise businesses, enabling them to grow sustainably and develop into new high growth profit segments.
The company’s share price has corrected by more than 27% in the past year. In our view, the bad news is already priced in and downside risk is limited. Our positive view on the company is based on improving fundamentals and reasonable valuation. We foresee better times for the company and believe it is poised to outperform the market in the coming period.
Lenovo Group is an investment holding company. Through its subsidiaries, Co. is engaged in: manufacturing and distribution of IT products and provision of IT services; manufacturing of computers and peripheral equipment; provision of business planning, management, global supply chain, finance, and administration support services; R&D of mobile software; and distribution of IT products as well as mobile phone, smart phone and tablet, server and storage. Co. also provides a full complement of ENERGY STAR® qualified notebooks, desktops, workstations, monitors, and servers. As of Mar. 31, 2015, Co. oeprated four geographical segments, China, Asia Pacific, Europe-Middle East-Africa and Americas.
AMC Wanhai Securities is an independent boutique brokerage covering Hong Kong & Asian listed equities for global institutional cilents. The company focuses on equity sales & trading, equity research, asset management and corporate finance.
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