Legend Holdings is an investment holding company with interests in IT, financial services, agriculture, property, and energy materials.
Lenovo released its financial results for the third quarter of the 2019-2020 fiscal year, which showed that its revenue in the third quarter was CNY99.3 billion yuan, and its pretax profit was CNY 2.75 billion, up more than 11% year on year, while its net profit was CNY1.82 billion, up 11% year on year.
After Liu chuanzhi split Lenovo into two and formed Legend holdings in 2000, the old technology company that most people are familiar with, Lenovo, has become a matrix of Lenovo star, Junlian Capital, Hony Capital, Lenovo Venture Capital and Lenovo Group.
Legend chairman, executive director and Lenovo founder Liu chuanzhi will step down as chairman and executive director of the company and become Legend's honorary chairman, senior adviser and member of the board's strategic committee. However, Legend as the original core decision-making position of the executive committee disbanded from then on.
It is estimated that the company's net profit in 2018/19/20 will be CNY 5.4 billion / 6.1 billion / 6.3 billion respectively, corresponding to the share price of 8/7/6 times PE on May 9. Referring to large multi-sector holding companies in Hong Kong, we believe that the reasonable valuation of the company should be 10 times PE, corresponding to the target price of HK $29
In terms of valuation, the company's IPO price is 39.8-43 Hong Kong dollars, with 353 million shares issued. The company's 2014 earnings ratio is 17.9-19.3 times, which is similar to subsidiary Lenovo Group and the mainland investment group listed in Hong Kong, with a reasonable valuation.