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UBS stated that the MIDH group of LENOVO GROUP (00992.HK)  +0.120 (+1.130%)    Short selling $6.53M; Ratio 5.489%   has been marginally profitable since the group sold a number of models at low prices and expanded the operating scales. The broker believed that Lenovo is streamlining its product portfolio, of which the supply chain management is better than MIDH group.

The broker believed that it's relatively easy for the company to reach the pre-tax income target of US$250 million in the third quarter due to the gradual recovery of PC demand in China.

The earnings forecast in 2015 to 2017 was lowered from US$0.084/0.111/0.128 to US$0.078/0.104/0.119, reflecting the share dilution and revised assumption for business earnings forecast on Motorola and X86 server business. The target price was cut from $13 to $12.8 and the rating was maintained at Buy.

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