The market value has broken hundreds of billions of Hong Kong dollars.
The Sci-tech Innovation Board will add another blockbuster technology company, this time Lenovo Group, the world's number one PC shipment.
Lenovo Group (00992.HK) announced on the evening of January 12 that the board of directors has approved the possible issuance of China Depository Receipts (CDR) and the initial proposal for the listing and trading of CDRs on the Shanghai Stock Exchange Science and Technology Innovation Board.
The company intends to issue new ordinary shares, which account for no more than 10% of the total number of ordinary shares issued after the expansion.
Stimulated by this news, the Hong Kong stock Lenovo Group opened sharply higher by nearly 15% in the morning trading on January 13, and closed at 8.83 Hong Kong dollars, up 9.69%, a record high in the past five years.
The market value successfully broke 100 billion, reaching 106.3 billion Hong Kong dollars.
The Science and Technology Innovation Board will welcome the return of Lenovo Group
According to the Lenovo Group’s announcement, the new shares to be issued this time will account for no more than 10% of the total number of enlarged shares. The funds raised will be used for the research and development of technologies, products and solutions, strategic investment in related industries, and supplementing the company’s working capital.
The above-mentioned overall recommendations for the issuance of CDRs and the sci-tech innovation board are subject to market conditions, shareholder approval and the necessary approvals of relevant stock exchanges and regulatory agencies.
Based on the total share capital of Lenovo Group, it is estimated that 1.33 billion new shares will be issued on the Science and Technology Innovation Board, and the amount of financing is expected to be about 10 billion yuan.
If all goes well, the A-share Sci-tech Innovation Board will usher in the world's largest PC shipment company.
In the past two years, the capital market has set off a wave of Hong Kong stocks returning to the A-share sci-tech innovation board. According to preliminary statistics from the Red Star Capital Bureau, there are currently many star companies SMIC (688981.SH) and Junshi Biology (688180.SH) , Kang Sino (688185.SH) and Shenzhou Cell (688520.SH), etc.
Some analysts say that listing on the Science and Technology Innovation Board is conducive to improving company valuation and liquidity, and technology core assets are also more popular in the A-share market.
In response to this sci-tech innovation board listing application, Lenovo Group stated: “We believe that the return to the A-share listing plan will help strengthen the company’s strategy and the booming capital market, and enhance the convenience for investors to invest in Lenovo, thereby further Unleashing the value of Lenovo allows us to invest more in technological innovation, service transformation and intelligent transformation, and better promote the digital and intelligent transformation and upgrading of various industries."
Yang Yuanqing, Chairman and CEO of Lenovo Group, said: “Leveraging on our core competitive advantages in operational excellence, global resources, and local delivery, Lenovo will firmly grasp the development opportunities of digital and intelligent transformation, and create long-term opportunities for the society and shareholders. Continuous returns."
PC business still dominates the market value of more than 100 billion Hong Kong dollars
IDC's latest data shows that in 2020, the global PC market shipments increased by 13.1% year-on-year, of which the fourth quarter surged by 26.1% year-on-year to 91.6 million units.
Among the top three manufacturers, Lenovo Group's shipments grew by 29% year-on-year, ranking first in the world, and its global market share rose to 25.2% in the fourth quarter.
From the perspective of business segments, Lenovo Group currently has two major segments: smart device business group and data center business group.
Among them, the smart device business group is divided into personal computer and smart device business, and mobile business.
The personal computer and smart device business is currently the main source of Lenovo's revenue. The turnover in the second fiscal quarter was 79.3 billion yuan, accounting for nearly 80% of the total revenue.
It can be seen that although Lenovo Group claims to have been transforming for many years, it is still the dominant PC business, while the proportion of mobile business and data business is still too small.
At a time, Lenovo's mobile phones were also very promising, occupying the top four in global smartphone shipments.
However, it has shrunk year after year, from 18% of the previous revenue to 9% now.
With the rapid rise of Huawei, Xiaomi, OPPO and other manufacturers, Lenovo's smartphones have been marginalized in the domestic market. Now its main positions are Latin America and North America, and it maintains the second place in the Latin American smartphone market in terms of shipments.
Although Lenovo's data center business group has a good growth rate, its revenue is still less than 10%.
Lenovo's share price in Hong Kong stocks has been relatively sluggish for a long time.
However, since December last year, Lenovo Group's share price has been rising, steadily rising from about 5 Hong Kong dollars to more than 8 Hong Kong dollars, an increase of over 50% during the period.
As of the close on January 13, the market value of Lenovo Group has successfully exceeded the 100 billion Hong Kong dollar mark.
The CCB International Research Report pointed out that Lenovo Group’s plan to list on the Science and Technology Innovation Board will become a catalyst to promote valuation, because it can attract more mainland investors, and the group’s software service revenue will grow rapidly, which will provide higher profit margins and Increasing profitability will help to be re-rated in the long run. We are confident that the relevant business will grow at a compound annual growth rate of 30% from 2021 to 2022, and the overall revenue ratio will increase to 14% in 2023.
CCB International raised Lenovo's target price from HK$6.7 to HK$10.5 and maintained its "outperform" rating.
Chengdu Commercial Daily-Red Star News reporter Li Weiming