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GUANGZHOU, China — Shares of Hong Kong-listed Lenovo closed over 9% higher on Wednesday after the Chinese PC maker said it plans to list stocks in Shanghai.
Lenovo shares closed at 8.83 Hong Kong dollars paring earlier gains when the stock went as high as 9.42 Hong Kong dollars.
On Tuesday, Lenovo said it had filed a request to the Hong Kong stock exchange, asking them to issue so-called Chinese depositary receipts (CDRs) on the Science and Technology Innovation Board or Star Market of the Shanghai Stock Exchange.
CDRs allow mainland Chinese investors to buy equity in non-Chinese incorporated companies, and are similar to American depositary receipts (ADRs) which allow stocks of non-U.S. company shares to trade on American exchanges. They are technically not shares but represent equity interest in a company.
Shanghai’s Star Market launched in 2019 with the aim of attracting innovative technology companies through more relaxed listing rules than other stock boards. In December, the Star Market welcomed its 200th company.
Lenovo said it intends to issue new ordinary shares that would represent no more than 10% of the total enlarged number of ordinary shares of the company.
The proceeds from the issuance will be used for the company’s research and development of new technologies, products and solutions, strategic investments in related sectors, and replenishment of its working capital, Lenovo said in a statement.
“With Lenovo’s strong global presence and heritage in China, we are confident that this offering will help further realize Lenovo’s value by leveraging the booming China capital market at the same time enable investors in China to invest more easily,” Yuanqing Yang, Lenovo Chairman and CEO, said in the statement.
“The offering will allow us to make greater investments in technologies and innovations, and better drive digital and intelligent transformation across industries.”
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