Morgan Stanley covered LENOVO GROUP (00992.HK) +1.240 (+12.181%) Short selling $304.26M; Ratio 14.904% in its report. The broker opined that the stock has been undervalued. However, with AI PCs starting to rise in 2H24 and AI servers continuing to grow, the broker foresaw tremendous upsides for the company, and made the stock as the Top Pick in its coverage. The stock was upgraded from Equalweight to Overweight with TP of $15, up from $9.1.
Under Morgan Stanley's base case, the penetration rate of AI PCs will remain at less than 5% this year, but will rise to about 64% by 2028, said Morgan Stanley, adding that AI PCs will help drive up ASP and bring higher margins to PC OEMs. The broker viewed LENOVO GROUP as a major beneficiary in Asia.
Morgan Stanley forecast LENOVO GROUP's share of AI PC revenue to rise from about 2% in FY2024 to about 53% in FY2028, the highest among global PC OEMs. LENOVO GROUP also has its own AI chip and the most comprehensive AI features and assistant (XiaoTian/ AI Now).
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-05-22 16:25.)
