[ET Net News Agency, 13 November 2019] Goldman Sachs lowered its target price for
Lenovo Group (00992) to HK$6.5 from HK$7.3 and maintained its "buy" rating.
The research house cut its FY2020/21/22 EPS estimates by 16%/22%/14% mainly on a higher
opex ratio (raising marketing and R&D expenses) and higher interest rates and tax rate, as
FY2Q 2020 results signaled Goldman's previous assumption could be too aggressive.
Goldman changed its valuation methodology to a P/E-based SOTP versus 2.4x 2020 PB
previously, given the company has delivered positive profits for 7 consecutive quarters
with smartphones in four consecutive quarters, and Goldman expects sustainable profits
going forward. (KL)