Lenovo share price to sink or swim in 2024?

Lifetime Membership In my previous article, I wrote that Lenovo share price should start to fly in the second half of 2023. Indeed, the counter went on a rampage to hit a 2-year high of HK$11.00. The bullish run of Lenovo was largely attributed to the growing optimism of the recovery of the PC market, which has been in the doldrum since 2022.

During the period of 2020 and 2021, PC manufacturers had churned out more PC to meet the increased demand of PC to support remote working and online learning due to the pandemic. Post-pandemic, supply outstripped demand as consumers turned cautious in the aftermath of inflationary pressure, high interest rates and concerns of recession. Amid the challenging macro-economic environment, Lenovo’s business remained robust and resilient as the past two years had been profitable for the Group.

Given the strong business performances in the past two years, investors must be surprised that Lenovo share price had turned bearish since the start of 2024. Year-to-date, Lenovo share price dived 24% to hit HK$8.38. The key reason for the bearish run of Lenovo share price should be the release of the data for the global PC shipment. According to Gartner, worldwide PC shipments totaled 63.3 million units in the fourth quarter of 2023, a 0.3% increase from the fourth quarter of 2022. Apparently, the year-end holiday season in 2023 has failed to trigger a significant recovery for the PC market.

On the other hand, the slowdown of the Chinese economy has affected Lenovo substantially as the country is its largest revenue contributor.  Lenovo share price, being one of the components of the Hang Seng Index, was also caught in the mighty storm of the Chinese stock market turbulence, which saw a devastating US$7 trillion rout in February 2024.

Lenovo share price surged 31%

Lenovo share price to rocket in 2023?

The volatility of Lenovo share price is nothing new for investors. Many of them would recall that the scrapped IPO of Lenovo in Shanghai Stock Exchange in 2021 had caused Lenovo share price to dive 17% but not for long as the counter recovered swiftly following its inclusion in Hang Seng Index in March 2022. Subsequently, the US Federal Reserves interest rate hikes and the Russia-Ukraine war combined to torpedo the form of Lenovo share price, causing the stock to be sluggish in the latter half of 2022.

2023 was a glorious year for Lenovo share price as the counter surged from HK$6.40 in the start of the year to smash a high of almost HK$11.00. Against this backdrop, an SG Wealth Builder member has written in to enquire the outlook of Lenovo share price in 2024.Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in Lenovo before. Whether Lenovo share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.

Lenovo share price at turning point?

For the past two years, I had been monitoring the electronics sector closely as I am vested in AEM Holdings, a semiconductor test solutions provider listed in SGX. Post-pandemic, the global inventory glut for PC should have bottomed and the demand for the next-generation PC should spur the next boom. According to data released by the Semiconductor Industry Association, global semiconductor sales were sluggish early in 2023 but rebounded strongly during the second half of the year, and double-digit market growth is projected for 2024.

Despite the strong outlook of the electronic sector, Lenovo share price is having bouts of volatility lately due to the turbulence engulfing the China stock market. However, my opinion is that Lenovo share price is [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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