[ET Net News Agency, 21 May 2020] Citi Research lowered its target price for Lenovo
Group (00992) to HK$5.7 from HK$7 and maintained its "buy" rating.
The research house said Lenovo's 4Q FY2020 results beat, despite the supply chain
disruptions caused by the COVID-19 outbreak, driven by the faster-than-expected resumption
of production in China (ex. Wuhan) and better performance in PCSD (PC and Smart Devices).
While MBG (Mobile Business Group) is likely to remain under pressure in 1Q FY2021 due to
lockdowns in the US and LATAM, the digital transformation across various verticals would
drive the long-term growth in PCSD and DCG (Data Center Group), offsetting the weakness in
smartphones.
Citi lowered its FY2021/22 EPS forecasts by 17%/14% to factor in the higher loss
guidance in MBG and higher expenses from PCSD and DCG related to logistics. (KL)