Lenovo shares surge after Shanghai STAR Market listing plan

Shares of Lenovo surged more than 15 percent Wednesday morning after China’s top computer vendor announced its plan to list on the Shanghai STAR Market as another dual-listing tech giant.

Its share price jumped to 9.30 Hong Kong dollars (US$1.19) increasing its market value to more than 112 billion yuan (US$17.2 billion) following its domestic listing plan announced Tuesday night. The company's share price had already grown by 8 percent Tuesday.

Hong Kong-listed Lenovo plans to propose issuance of CDRs, or Chinese depositary receipts, on the STAR Market, with new shares representing no more than 10 percent of total enlarged shares, according to its statement to the Hong Kong stock exchange. 

Proceeds from the issuance will be used for research and development of new technologies, products and solutions, strategic investments and replenishment of working capital, according to Lenovo officials.

“This offering will help further realize Lenovo’s value by leveraging the booming China capital market, allowing us to make greater investments in technologies and innovations and better drive digital and intelligent transformation across industries,” said Yang Yuanqing, Lenovo chairman and chief executive officer.

The STAR board offers fewer restrictions on initial public offerings than other domestic stock markets, with a pilot registration system, unlimited valuations and eased trading rules. It has attracted companies involved in fields such as cloud computing, semiconductors, information technology and biomedicine.

Giant chipmaker Semiconductor Manufacturing International Corporation (SMIC) got listed on STAR Market last July, making it the biggest company by market value on STAR. 

Like Lenovo, SMIC is also listed on Hong Kong’s “red chip” index, exemplifying STAR Market's appeal to offshore-listed companies seeking domestic listings, analysts said.

In 2020, global personal computer sales increased 13.1 percent year on year, the highest growth rate in a decade. Lenovo is in the top position with 25 percent market share, according to research from International Data Corporation.