改善联想的长期前景可见性 目标价上调至17港元

Legend Holdings (3396.HK) Improving Lenovo’s LT Outlook Visibility; Raise TP to HK$17 CITI'S TAKE We update our Legend model on the back of Citi’s recent Lenovo earningsupgrade (on stronger revenue and better profitability for ISG business) andLenovo’s recent completion of its issue of US$2,000m zero couponconvertible bonds due 2033. Reflecting also the latest market values ofLegend’s listed investments and FX, we raise the TP of Legend from HK$16to HK$17, still at a 72% target NAV discount (1 S.D. below historical mean).Despite recent share price pullback, Legend is trading at a steep ~78% NAVdiscount on our estimate. Maintain Buy. nBuy Price (29 Jun 26 16:10)HK$13.50Target priceHK$17.00↑from HK$16.00Expected share price return25.9%Expected dividend yield2.6%Expected total return28.5%Market CapHK$31,809MUS$4,057M Earnings Revisions—Mainly reflecting latest CitiE Lenovo earnings forecasts andLegend’s slightly lower stake in Lenovo (per reported in Lenovo’s latest FY25/26annual report), we trim our FY26E earnings estimates by 3%. We raise our FY27-28Eearnings estimates by 32-36%. NAV and TP change—We raise Legend’s end-27E NAV estimate by ~7% toHK$60.72. We apply an unchanged 72% target NAV discount (1 S.D. below historicalmean) and arrive at our TP of HK$17 (prev: HK$16). Timothy ChauAC+852-2501-2450timothy.chau@citi.com George Choi, CFA+852-2501-2489george.choi@citi.com Bull/Bear: Legend Holdings (3396.HK) Legend Holdings Company description Legend was established in 1984 by the Chinese Academy of Sciences (CAS) asa research institute on computer science and technology. The group became aPC manufacturer in 1990 under the 'Legend' brand, and Lenovo was listed in1994. The stock first traded on the Main Board of the Hong Kong StockExchange on 25 June 2015. It is currently a Chinese investment holdingcompany with diversified investments across sectors (spanning fromtechnology to financial services to new materials to agriculture and goods).The group has identified two major business segments: industrial operations(including Lenovo, Levima Group, BIL and Joyvio Group) and industrialincubations & investments (including the fund investments and other assets). Investment strategy We rate Legend shares as Buy. Despite the decline in its operationalperformance in recent years, we like Legend shares as we expect upsidepotential on its stepped-up investment in technological innovation,particularly in AI-related fields. We expect improvement from non-Lenovobusinesses in the long run. Meanwhile, Legend has been trading at asignificantly deeper NAV discount than the average of the Chinaconglomerates under our coverage. The stock is also trading at a largediscount to its interest in Lenovo at market price. Valuation We derive our HK$17.00 target price for Legend, based on a 72% discount (-1S.D. discount to historical average) to 2027E NAV of HK$60.72. The -1 S.D.discount is consistent with our approach in our conglomerate coverage. Wemark Legend’s listed subsidiaries and associates to market and multiply themby the respective percentage shareholding stakes in calculating our NAV. Wevalue the 85.54%-owned Joyvio Group at investment cost but with a 20%discount owing to its loss-making status. We value the 89.98%-owned BIL at0.9x end-FY25 fair value on book. For of the fund investments, we adopt theirlatest fair values on book. We adopt the latest fair value on book for theinvestment properties. We value other assets (including Zhengqi Holdings, JCFinance & Leasing and Hankou Bank) by adopting their respective net assetvalue on book. We value Legend's stake in Hyundai Insurance at investmentcost, Shanghai Neuromedical Center at 1x PS and Bybo Dental at the impliedvaluation from its latest transaction. Risks The following downside risks could prevent Legend shares from achieving ourtarget price: 1) downturn in China’s economy or changes in governmentpolicies as Legend’s investments are largely exposed to China; 2) changes ininterest rates which could affect investment performance; 3) regulatory risk inthe banking and advanced materials sectors; 4) weak market demand of thePC industry; 5) lower product spreads of Levima Group due to price fluctuation of chemicals; 6) significant changes in the valuation of its listedinvestments. Lakala Payment (300773.SZ; Rmb15.15; 3; 29 Jun 26; 15:00) Valuation Our target price for Lakala of RMB23.6 is based on 22x 2027E P/E, derivedfrom a 10% premium on the average forward P/E of 20x since 2020. Our 22xmultiple reflects Lakala's potential increasing market share after smallerplayers exit post regulatory crackdown in the past few years. Risks Upside risks that could mean the shares fail to achieve our target priceinclude: 1) better-than-expected consumption recovery that supports GPVgrowth; 2) more stable competition from other third-party payment providers,bank-affiliated service providers, and e-wallet providers; and 3) better-than-expected fee rate increases due t