Shanghai’s STAR board and Stock Market launched in 2019 and it offers easier trade rules, unlimited valuations, lesser limitations, and restrictions on initial public offerings than most of the other stock markets. The main purpose of the STAR board is to attract innovative companies that are involved in the fields of biomedicine, semiconductor and processors, cloud systems, and IT.
Now, Lenovo is a Chinese tech innovative company that is listed with Hong Kong Stock Market, and recently, it filed a request to the Hong Kong Exchange to issue Chinese Depository Receipts (CDRs) for the company’s dual listing on Shanghai’s STAR market.
A Surge in the Shares of Lenovo
After Lenovo made this announcement, its shares in the Hong Kong Stock Market surged more than 15%, and the share price spiked up to 9.30 Hong Kong dollars. This raised its market value to more than $17 billion in the US currency. As a result, the company’s share price closed at 8.830 Hong Kong dollars, which is approximately 9.6% higher than before.
Representation of the Proposed Shares
Lenovo has announced that with its request for the issuance of the CDRs on the STAR market, its new shares will represent approximately 10% of its total enlarged shares, and nothing more.
As per Lenovo, the proceeds from the CDRs issuance will be used by the company in the fields of research, development, and experimentation of new technology. The company is looking forward to expanding its capabilities with the latest and highly innovative technological products, solutions, and even investments to support its working capital.
Besides, these offerings will help to reinforce and strengthen Lenovo’s position and value in China’s capital market too. It will also attract more investors and that will open more ways for Lenovo to dive into providing better technological solutions than ever before.
How do CDRs help?
CDRs allow Chinese investors and companies to buy shares in non-Chinese companies that trade in China. However, these are not exactly shares, but they represent the “equity interest in a company.”
I’m Ava Paul, an experienced news website author with a special focus on the entertainment section. Over the past five years, I have worked in various positions of media and communication at World Stock Market. My experience has given me extensive knowledge in writing, editing, researching and reporting on stories related to the entertainment industry.
