[I-bank focus]HSBC raises Lenovo (00992) to HK$12.4

    HSBC Global Research raised its target price for Lenovo Group (00992) to HK$12.4 from HK$11.4, and upgraded the stock to "overweight" from "neutral".
  The research house said Lenovo's 3Q FY2015 results show that revenue contribution from Motorola business is strong and gross margin on legacy PC business is higher than expected. Lenovo's tax rate was merely 6% in the quarter, below historical average of 20% as losses from server and Motorola help to offset tax liability.
  Looking forward, 4Q FY2015 is the seasonally weak quarter and HSBC expects Lenovo's
revenue to drop 16% q-o-q. However, earnings momentum is likely to accelerate as the
integration benefits will begin to emerge, with improved visibility on its long-term growth strategy. 
  It raised FY2015-16 earnings estimates by 8.5% and 11.9% on higher margin and lower tax.