On August 13, Citi released a research report stating that Lenovo Group (00992.HK) demonstrated robust performance growth, primarily driven by explosive growth in its Infrastructure Solutions Group (ISG) and sustained leadership in its Intelligent Devices Group (IDG). The report revealed that Lenovo's gross profit margin improved year-on-year to 16.5%, surpassing both Citi's and market expectations, mainly attributable to the optimization of its revenue mix and the enhanced gross profit margin of the ISG business. Meanwhile, under non-GAAP accounting, Lenovo's net profit surged by 176% year-on-year to reach US$1.075 billion, exceeding Citi's and market expectations by 64% and 149%, respectively, with the non-GAAP net profit margin rising to 4%. Based on a sum-of-the-parts valuation approach, Citi assigned Lenovo a target price of HK$31, corresponding to a forecasted P/E ratio of approximately 13.6x for FY2028, with IDG and SSG businesses valued at 10x P/E and ISG at 16.7x P/E, in line with industry averages. Citi maintains a 'Buy' rating on Lenovo, citing strong prospects for server demand and profitability, while expecting stable performance in its PC, smartphone, and services businesses.