Stock Idea Lenovo: Undervalued Chinese PC giant with s | FSMOne SG - Research Highlights

Stock Idea

Lenovo: Undervalued Chinese PC giant with strong upside potential

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• Lenovo’s transformation towards a more solutions-based business can drive long-term growth.

• Strong market share in China supports earnings resiliency, especially as China's GDP growth continues to outperform peers on a relative basis.

• Lenovo may see headwinds from the PC downcycle, but we see support from government and commercial demand for PCs, as well as its other non-PC segments.

• Valuations for Lenovo remain depressed amidst pessimism about the PC industry and the macro situation in China. Using a fair P/E of 9X, we arrive at a target price of HKD 11.8 by FY24, or an upside of +71% in under two years. Lenovo’s consistent dividends can also help to bolster gains for any investor in Lenovo.

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: Lenovo Group Limited (HKEX:0992)