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Citi: LENOVO GROUP 1FQ Results Way Beyond Expectations; AI Growth Narrative Proven
2026-08-13 13:42:25
Citi published a research report covering LENOVO GROUP (00992.HK)'s results for 1QFY26/27 ended June 2026, which were robust and sharply beat, further reinforcing the structural growth narrative driven by AI. Revenue swelled 43% YoY to USD26.943 billion during the period, marking a quarterly record high and topping Citi's and market expectations by 24% and 20%, respectively.

Earnings growth was mainly underpinned by exponential growth in the Infrastructure Solutions Group (ISG) and the continued leadership position of the Intelligent Devices Group (IDG). Gross margin widened YoY to 16.5%, above Citi's and market's expectations, reflecting an improved revenue mix and ISG gross margin expansion. Non-GAAP net profit leaped 176% YoY to USD1.075 billion, exceeding Citi's and market expectations by 64% and 149%, respectively.

Citi set a TP of HKD31 for LENOVO GROUP. The broker maintained its Buy rating on the stock, citing optimism over strong server demand prospects and profitability, as well as stable performance in the PC, smartphone and services businesses.
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