On Jan. 12, Chinese PC maker Lenovo Group Ltd. said that it is planning to issue Chinese Depositary Receipts (CDRs) – representing up to 10% of its total number of shares – to be listed on the tech-heavy Nasdaq-style Shanghai STAR Market.
The company stated Tuesday they have issued approximately 12.04 billion common shares and will seek special authorization from shareholders to issue up to roughly 1.34 billion shares, representing 10% of its total issued shares.
The Beijing-based PC giant said it will use the proceeds for research and development of new technologies, products, and solutions.
Lenovo started publicly trading in 1994 after raising US$30 million in a Hong Kong IPO. Those proceeds were used for finance sales offices in overseas markets such as Europe, North America and Australia to expand abroad.
By 1996, the company had already become a leader in China and started to sell its own laptops. Then in 1998, it swept the domestic market and held about 43% of the domestic PC market share.
Recently, the International Data Corporation (IDC) released the latest statistics on the global PC market, showing that shipments increased by 13.1% year-on-year in 2020, rising by 26.1% to 91.6 million units year-on-year in the fourth quarter.
Notably, Lenovo’s shipments grew by 29% compared to last year, ranking first in the world, and its global market share rose to 25.2% in the fourth quarter last year.
Akin to American Depositary Receipts (ADRs), the CDRs is a type of depositary receipt that allows investors to buy shares of tech giants listed in overseas markets.
Following the announcement, shares of Lenovo soared 15% on the morning of Jan. 13.