Hong Kong stock Lenovo Group opened sharply higher by nearly 15%.
On the evening of January 12th, Lenovo Group (00992.HK) submitted an announcement to the Hong Kong Stock Exchange, announcing that the board of directors has approved the possible issuance of China Depositary Receipts (CDR), And the Shanghai Stock Exchange Science and Technology Innovation Board to apply for the preliminary proposal of CDR listing and trading.
According to the proposal, Lenovo Group intends to issue new common shares, which will account for no more than 10% of the company’s total issued common shares after expansion. The funds raised will be used for the research and development of technologies, products and solutions, strategic investment in related industries, and supplement the company’s working capital.
Lenovo Group stated that the total number of common shares issued by the company on the announcement date was approximately 12.04 billion shares. The company will seek special authorization from its shareholders to issue a maximum of approximately 1.338 billion shares of the company’s common stock, representing 10% of the company’s total issued shares after the issuance of basic shares.
Affected by this news, Lenovo Group closed up 8.93% yesterday, and this morning it gapped again 14.91% to open at 9.25 Hong Kong dollars. The stock price hit a new high since June 2015, and the latest total market value was 111.4 billion Hong Kong dollars.
In recent years, under the guidance of the “3S strategy” (intelligent Internet of Things, intelligent infrastructure, industry intelligence), Lenovo has continuously tried to transform.
On June 10, 2019, Yang Yuanqing issued an internal letter stating that on the basis of the original Lenovo big data team and business, the data intelligence division was established. Since then, Lenovo Group has formed a group structure composed of four major businesses: Intelligent Device Group (IDG), Data Center Business Group (DCG), Lenovo Venture Capital Group (LCIG), and Data Intelligence Business Group (DIBG).
According to Lenovo’s second fiscal quarter financial report for the 2021 fiscal year ending September 30, 2020, announced in November 2020, Lenovo’s overall turnover for the fiscal quarter reached 100.5 billion yuan, a year-on-year increase of 7.4%.
Specifically for each business segment, the personal computer and smart device business part of Lenovo’s smart device business group increased by 7.6% year-on-year to 79.3 billion yuan; the data center business segment, the intelligent Internet of things business, increased 36% year-on-year. Infrastructure business increased by 21% year-on-year, and industry intelligence-related businesses increased by 72%; Lenovo’s software and services business revenue reached 8.5 billion yuan, a year-on-year increase of 39%, and its share of the group’s total revenue increased to 8.5%.
However, with the rapid popularization of smartphones and tablet computers in recent years, the global PC market is gradually entering a bottleneck period. The growth of the global PC business is showing a weak state, accounting for nearly the Lenovo Group’s total revenue Eighty percent of the PC business growth space will be greatly restricted.
In addition, subject to chip hardware supply and politicalInfluenced by changes in government procurement policies, the uncertainty risk of Lenovo Group’s PC business growth has further increased.
Yang Yuanqing, chairman and CEO of Lenovo Group, mentioned in an interview before that in one quarter last year, Lenovo could not supply millions of computers and tablets, mainly because some parts and components faced shortages. Some were not expected to grow in the industry at the beginning of the year, and some were affected during the epidemic, including important parts such as displays and chips.
For this return to A-shares, Yang Yuanqing said, “Lenovo’s plan to return to A-share listing will help strengthen the company’s strategic link with the booming domestic capital market, and enhance the convenience for mainland investors to invest in Lenovo. To further release Lenovo’s value.”