Monday, January 25, 2021
Martin Hennecke

Lenovo Shanghai listing may draw a following
Shares of Lenovo (0992) surged 9.69 percent in Hong Kong after it announced plans to issue Chinese depository receipts in Shanghai, which could raise about 10 billion yuan (HK$11.98 billion), making it the biggest Chinese firm to issue CDRs on the A-shares market. The company announced the plans Tuesday evening and said it will sell no more than 10 percent of its enlarged share capital in the CDR issuance. Lenovo plans to submit a listing application after a shareholders meeting in February. If successful, Lenovo would be the biggest Chinese firm yet to conduct such a listing in Shanghai since Beijing began a trial program in 2018 to lure big technology firms based overseas to sell yuan-denominated securities in China. China has produced some of the world's fastest-growing tech businesses, but mainland investors have been unable to easily share in the gains. The likes of Alibaba (9988) and Baidu have headed overseas to go public, leaving domestic investors to rely on staid state-run industries to get their fill of large new listings. The CDR would be China's version of the American depository receipts. It would package overseas equities and sell them in yuan on Chinese exchanges. Lenovo's proposal still needs approval from shareholders and regulators. Shares in Lenovo rose as much as 17 percent in Hong Kong yesterday, the biggest intra-day gain since April 2015. It closed at HK$8.83. Meanwhile, China plans to approve its first real estate investment trusts to help local governments finance infrastructure projects while allowing retail investors to tap into what may become a US$3 trillion (HK$23.4 trillion) market. The regulators may authorize the first few REIT products and get them listed as soon as the first quarter under a trial that began in August, according to people familiar with the matter. A handful of infrastructure projects including a sewage disposal plant operated by Beijing Capital (2868), a waste-to-energy electricity generator by Shougang Group and three public transportation projects are on a shortlist, though names are still being finalized, the people said. More projects could be added, they said. China Securities Journal reported that the country is expecting to roll out such REITs in the first half.

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