Lenovo withdraws Shanghai mega IPO, in a setback for the fundraising centre stage of China’s technology champions

The Shanghai Stock Exchange (SSE), which manages the Star Market, said it has ceased the review process for Lenovo’s application to sell shares

Lenovo, already listed in New York and Hong Kong, had planned to raise up to HK$13.6 billion (US$1.8 billion) in Shanghai

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A Lenovo assembly that produces surface mount technology (SMT) for Motorola phones at the Hubei provincial capital of Wuhan on August 20, 2021. Photo: Barcroft Media via Getty Images.

Published: 2:15pm, 9 Oct 2021Updated: 12:07am, 10 Oct 2021

Lenovo Group has pulled its blockbuster stock-sale application from Shanghai’s Star Market, making the withdrawal merely eight days after it was accepted by an exchange that casts itself as the centre stage for China’s technology champions.

The Shanghai Stock Exchange (SSE), which manages the Star Market, said it has ceased the review process for Lenovo’s application to sell shares, according to an announcement late on Friday. The Beijing-based company, the world’s largest maker of personal computers, asked to withdraw the application on October 8 along with its listing sponsor China International Capital Corporation (CICC), according to the statement.

The withdrawal is the second-biggest IPO cancellation in Shanghai since Ant Group, the affiliate of this newspaper’s owner Alibaba Group Holding, had its US$39.7 billion dual listing foiled in November 2020. Lenovo, whose shares are already listed on the New York and Hong Kong exchanges, had planned to raise up to HK$13.6 billion (US$1.8 billion) in Shanghai, making it the first Chinese company to sell so-called Chinese Depositary Receipts (CDRs) on China’s financial market place for technology companies.

The surprise cancellation is a setback for the Star Market’s push to attract offshore listed Chinese companies to list at home, part of the Chinese President Xi Jinping’s edict for domestic investors to enjoy the capital growth of the nation’s technology champions. Lenovo, founded by the technology entrepreneur Liu Chuanzhi nearly four decades ago, owns the IBM ThinkPad line of laptops and personal computers, as well as the Motorola line of smartphones.

Liu Chuanzhi, founder and chairman of Legend Holdings, later renamed Lenovo, during an interview in Hong Kong on 17 June 2015. Photo: May Tse.

Lenovo is the first so-called Red Chip company to raise funds in Shanghai through CDRs. Red Chips, listed in Hong Kong, are offshore-incorporated companies whose assets and businesses are in China.

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