Lenovo Dumps Shanghai Mega IPO, Flusters Beijing

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 center stage for China’s technology champions, Iris Ouyang reported for the South China Morning Post (SCMP).

Photo Insert: The Lenovo western headquarters in Xibeiwang, China

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 Corp. (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, who turned 77 in April, is the father of Jean Liu Qing, one of the founders of China’s dominant ride-hailing company Didi-Chuxing. Didi, with a 90 percent share of China’s ride-hailing market, forced its way to a US$4.4 billion IPO in New York in late June against the injunctions of Chinese regulatory officials, an act that has been characterized as “a deliberate act of deceit.”

The younger Liu has no involvement or any connection to Lenovo’s operations.

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