DBS: Lenovo Group Ltd – Initiating Coverage BUY TP HK$11.30

Leveraging 218m users in service-led transition

• Transforming from a hardware giant to a service-led company with growth to be driven by solutions and services 
• New SSG business is projected to have a 31% CAGR in operating profit in FY22-25 
• Expect higher-than-peers FY23/24 revenue of 3%/9% benefiting from rising investment in China’s data centres 
• Re-instate coverage with BUY and TP of HK$11.30 on improving net margin and undemanding valuation