Lenovo Group Ltd. shares 992,
The stock has gained as much as 7.2% and was last up 5.3% at 7.14 Hong Kong dollars (US$0.91).
The rally came after Lenovo, the world’s largest personal-computer maker, on Friday posted a 32% profit drop for its fiscal third quarter, as PC sales fell amid weak consumer spending and declining electronics demand globally. The bottom-line decline was narrower than some analysts’ expectations.
The company’s chief executive, in an interview with The Wall Street Journal on Friday, guided for resumed industry-wide sales growth from the second half of 2023, which would support Lenovo’s earnings rebound. Global PC sales volume fell 16% last year, the sector’s worst sales drop in over a decade, according to market research company Canalys.
Analysts also pointed to the relative resilience in Lenovo’s non-PC businesses, including server and IT-solutions operations. “Server and solutions would remain as the bright spots, helping to mitigate PC weakness,” Citi analysts said in a note. The two segments both delivered record-high profits during the October-December quarter.
“We think further downside could be limited, and a potential demand stabilization and margin recovery from 2H 2023 would serve as positive catalysts,” the Citi analysts said.