HK Stock Market Move | LENOVO GROUP(00992) Falls Over 8% Intraday; Short Selling Volume Notably Expands Recently as Market Doubts Over Returns on Massive AI Investments Resurface

LENOVO GROUP(00992) fell intraday by as much as %; as of press time, it is down 6.73% at HK$22.18, with turnover of HK$1.921 billion. On the news front, Google parent Alphabet's third-quarter revenue and profit both missed expectations, and even with somewhat "disciplined" capital expenditure, free cash flow remained negative at US$9.1 billion, marking a second consecutive quarter of negative value. Rising market doubts over whether massive AI capital investment can substantive returns have broadly hit AI hardware. Notably, LENOVO GROUP's short-selling scale has continued to expand. Data shows its shorted shares rose from 27.178 million shares on October 22 to 35.564 million shares on October 28, an increase of 30.86%, while the short-selling amount rose from HK$643 million to HK$844 million. An Orient research report noted that Lenovo benefits from domestic and overseas AI infrastructure. Some investors have limited understanding of Lenovo's server-related business; we see that the company has deep cooperation with Nvidia and others overseas and also has technical advantages domestically. In addition, some investors are concerned that declining shipments in markets such as PCs will put pressure on Lenovo's performance. The bank believes the company is expected to offset the impact of shipment declines through higher average selling prices, a larger share of high-end products, a better AI PC product mix, and procurement scale.