Citi says Lenovo Group (00992.HK) Q1 results were driven by explosive growth in
Infrastructure Solutions Group (ISG) and continued leadership in Intelligent
Devices Group (IDG). Gross margin rose YoY to 16.5%, above Citi and market
estimates. Non-GAAP net profit jumped 176% YoY to $1.075bn, beating Citi by 64%
and consensus by 149%; non-GAAP net margin widened to 4%. Citi sets a HK$31
sum‑of‑parts PT, implying a 2028F PE of ~13.6x (IDG and SSG at 10x; ISG at
16.7x, in line with peers) and maintains an upgrade/buy rating, citing strong
server demand, improved profitability and stable PC, smartphone and services
performance.
