[ET Net News Agency, 23 April 2020] Daiwa Research lowered its target price for Lenovo
Group (00992) to HK$5 from HK$6.6 and maintained its "outperform" rating.
The research house revised down its forecasts for Lenovo to reflect the latest COVID-19
developments. Daiwa lowered its 4Q FY2020 forecasts (ie, March-quarter) due to wider
outbreaks in the US/EU, but still expects a QoQ revenue recovery in 1Q FY2021 (ie,
June-quarter) on a capacity recovery in China and rush orders for PCs/servers on
work-from-home (WFH) demand.
It now expects Lenovo's 4Q FY2020 net profit to be only US$1m, much lower than its prior
estimate of US$30m. Daiwa cut its FY2020-22 EPS forecasts by 5-15%. (KL)