The latest Market Talks covering Technology, Media and Telecom. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

0527 ET - The planned merger of Hygon Information and Dawning Information Industry could combine resources and facilitate each other's business, Citi analysts say in a note. Chinese chip maker Hygon on Sunday night said it plans to acquire smaller peer Dawning by issuing new A shares to all Dawning shareholders. Dawning, which has been on the U.S. Entity List since 2019, has seen its server shipments plunge to 8,600 units in 2024 from 303,000 units at its 2018 peak due to hardware constraints, the analysts say, citing IDC data. Dawning has shifted its focus to CPU and GPU board design and production from server manufacturing, they note. Thus, the restructuring could help Dawning enhance cooperation with CPU and GPU maker Hygon, and enable broader collaboration with server manufacturers, they add. (sherry.qin@wsj.com)

0451 ET - Lenovo Group's PC margin will likely be pressured in the near term by tariffs, CGS International analyst Ray Kwok says in a research note. CGS International expects Lenovo's PC pretax income margin to be roughly flat at 7.2% in fiscal 2026. The PC maker could suffer from incremental U.S. tariff costs by accelerating its production relocation to Vietnam from China and raising its PC pricing in the U.S. to reflect the tariff, it adds. Its PC revenue could rise 3% in fiscal 2026 due to a commercial demand recovery and higher average selling prices on better product mix, the analyst says. CGS International maintains its add call on Lenovo but lowers the target price to HK$13.80 from HK$15.00. Shares last ended at HK$9.29. (sherry.qin@wsj.com)

0052 ET - WiseTech's increased debt leverage is likely to be the market's only concern about the Australian logistics-software provider's acquisition of e2open, E&P analyst Paul Mason says. He points out in a note to clients that leverage will climb to 3.5 times fiscal 2025 Ebitda as a result of the US$2.1 billion acquisition. However, Mason says that this was well flagged by WiseTech, adding that the company expects the level to fall to 2 times Ebitda over three years. E&P has a positive rating and a A$139.00 target price on the stock, which is up 5.7% A$105.76. (stuart.condie@wsj.com)

2340 ET - While AI computing demand will likely remain positive in the long term, concerns over demand-supply mismatch could weigh on near-term sentiment for the Taiwan data-center hardware sector, Daiwa analysts say in a note after the recent AI exhibition, Computex, in Taipei. The exhibition was "largely a non-event" for the sector, they say. Differences between Nvidia's GB200 server and its new GB300 server are limited in terms of infrastructure upgrades required, they say. Therefore, Taiwan hardware stocks will likely hinge more on the AI outlook in 2026, which remains uncertain at this stage, they say. "While we have a positive long-term view on AI computing demand, driven by the ongoing shift to agentic and physical AI, we are cautious about near-term volatility," they add. (sherry.qin@wsj.com)

2338 ET - Lenovo's shares could be weighed by tariff headwinds in the near term, Morningstar analyst Kazunori Ito says in a research note. That is even as he thinks the market has overreacted to the PC maker's 4Q profit miss, which sent the stock 5.4% lower Thursday. Ito notes that Lenovo plans to transfer its PC production for U.S. exports to Vietnam by September, which will limit the direct tariff impact. Morningstar trims Lenovo's fiscal 2026 operating margin forecast to 3.6% from 3.8%. It also lowers its PC shipment forecasts for Lenovo in fiscal 2027 to account for slowing demand in the U.S. due to increased pricing after tariffs, a weaker macroeconomic environment amid U.S.-China trade tensions and fading replacement demand. Shares are last 1.8% lower at HK$9.33. (sherry.qin@wsj.com)

(END) Dow Jones Newswires

May 26, 2025 12:20 ET (16:20 GMT)

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