A recent research report maintains an outperform rating and earnings forecasts for Lenovo Group (00992). Based on non-HKFRS net profit, the current stock price implies 10.4x/8.9x P/E ratios for FY2026/27. Considering the company's software and hardware innovation capabilities, potential for continued market share gains in the edge AI market, and valuation window shifts, analysts raised the target price by 10.4% to HK$14.8 based on 14.0x P/E for FY2026, representing 34.6% upside potential.

**Company Updates**

Recent visits to Lenovo Group's Shenzhen Future Center and discussions with management revealed the company's latest AI smart device strategies. Lenovo continues to deepen its "one body, multiple terminals" strategic layout in edge AI, innovating not only at the hardware level with rollable screens and transparent displays, but also strengthening local large model capabilities and enhancing cross-device experiences at the software level. This sustained innovation is expected to drive steady market share growth in the global PC and mobile markets.

Additionally, tariffs and other global macro environment changes remain key concerns for investors regarding this international enterprise. Lenovo's leading global manufacturing capacity layout provides the company with superior systematic risk management capabilities.

**AI PC Progress and IDG Multi-faceted Growth**

According to IDC and public earnings calls, global PC shipments grew 6.5% year-over-year in Q2 FY25, with Lenovo outperforming the industry at 15.2% growth. The company's leading position continues to expand with market share reaching 24.6%, primarily benefiting from precise product iterations like AI PCs and global supply chain layout.

AI PC penetration is accelerating, with Lenovo's China market AI PCs (defined by Lenovo with five key characteristics) accounting for 27% of total laptop shipments in Q2 FY25. During recent demonstrations, visitors experienced PC "black technology" including rollable screens and transparent displays. Building on hardware innovations, the company expects edge-side models to iterate and upgrade every six months.

In mobile, Q2 FY25 revenue grew 14% year-over-year, marking the eighth consecutive quarter of outperforming market growth. This is primarily attributed to effective breakthroughs of high-end series including Moto Razr foldables and Edge models in overseas markets.

**Cross-device Experience Innovation and Multi-terminal Ecosystem Development**

At the FY25 year-end rally, Lenovo IDG President Luca emphasized the company's "one body, multiple terminals" strategy, using one AI intelligent agent to serve PCs, phones, tablets, and other devices. For the domestic market, Lenovo empowers AI PCs and other terminals with the "Tianxi" personal super intelligent agent. Since its launch, user engagement has continuously improved, with Weekly Active Users (WAU) averaging 40% by the end of Q2 FY25.

Recent demonstrations showed Lenovo's continued upgrades in seamless cross-device experiences, echoing the recent Lenovo Innovation World conference in Berlin. Investors should focus on Lenovo's SmartConnect super-connectivity capability transitions and future innovations in file sharing, APP streaming, and open ecosystems.

**Global Manufacturing Layout Strengthens Response to International Policy Changes**

Lenovo ranks eighth on Gartner's 2025 Global Supply Chain list, with over 30 owned or partner manufacturing bases across 11 global markets, establishing a "China+N" strategic layout. This global manufacturing capacity layout provides the company with safeguards against tariffs and other macroeconomic uncertainties.