Citi: Raise the target price of Lenovo Holdings (03396) to HK$22.5 to reaffirm the “buy”

The Zhitong Finance App learned that Citi released a research report stating that it slightly raised the basic scenario target price of Lenovo Holdings (03396) from HK$21.5 to HK$22.5, maintained a “buy” rating, and lowered the 2026-2028 net profit forecast by 3% to 10%.

According to the bank, in response to its recent preview of Lenovo Group (00992) results for the second fiscal quarter ending the end of September this year, showing that ISG continues to be strong, IDG execution is stable, and SSG maintains a double-digit expansion, the bank updated the Lenovo holding model, thus making the above net profit forecast adjustments.

In order to reflect the latest market value and exchange factors of Lenovo Holdings' listed investment, the bank lowered its net asset value (NAV) estimate by about 2% to HK$75.06 per share, believing that the potential sale of BIL or the first step for it to sell non-core investments and transform it into a more technology-focused holding company would help narrow the NAV discount. The bear market scenario included the potential dilution effects of Lenovo's convertible bonds and warrants, which were valued at HK$16.8 per share.