What’s new: China’s Lenovo Group plans to issue Chinese depository receipts (CDRs) on the tech-savvy STAR Market in Shanghai, the world’s biggest PC maker said Tuesday.
The sale of new shares will represent as much as 10% of the company’s equity, or 1.34 billion shares, Hong Kong-listed Lenovo said in a statement.
Lenovo said proceeds will support the company’s research and development of new technologies, products and solutions and strategic investments in related sectors.
What’s the context: Similar to American depositary receipts (ADRs), Chinese Depositary receipts refer to shares in non-Chinese companies that trade on Chinese exchanges. China approved a CDR listing pilot program in 2018 to encourage more overseas-listed tech companies to sell shares at home.
In October, Chinese electric scooter maker Segway-Ninebot became the first company to issue CDRs on the STAR Market.
Lenovo’s Hong Kong-traded stock had a market value of HK$97 billion ($12.5 billion) as of Tuesday. Its ADRs traded on the U.S. OTC market were worth about $12.7 billion after an 11% surge Tuesday.
Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com).
