LEGENDHOLDING (03396) has surged over 5% again, bringing its cumulative gain for this month to over 40%. At the time of writing, the stock was up 5.36% to HKD 13.96, with a turnover of HKD 188 million.

The rally follows a research report from Citi, which noted that LEGENDHOLDING is the parent company of Lenovo Group. Citi updated its model, reflecting Lenovo Group's increased market share amid shortages of key components and production capacity constraints, rising average selling prices and demand for personal computers (PCs) and GPU servers, continued operational leverage improvements and an expanded product portfolio following the acquisition of Infinidat, as well as Lenovo Group's better-than-expected latest quarterly results.

The bank views LEGENDHOLDING as a potentially cheaper way to gain exposure to the same Lenovo business. After accounting for the latest market capitalization of LEGENDHOLDING's listed subsidiaries, Citi raised its target price for the stock from HKD 10.6 to HKD 16, based on a 72% discount to target net asset value (still one standard deviation below the historical average). The bank maintained its "Buy" rating.