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Mainland listing of shares soon, says Lenovo CFO

(China Daily/agencies)
Updated: 2009-09-03 07:57

 

The computer maker expects to be in black by 2010.[Bloomberg]

Lenovo, the world's No 4 PC brand, said it plans to list on the Shanghai Stock Exchange when rules permit. The computer maker also expected its operations in mature markets such as Western Europe and the United States to return to profitability by March 2010, as tech demand there picks up with the easing of the global downturn.

The mainland listing move would make sense for Hong Kong-listed Lenovo, since it developed on the mainland and is one of the best-known brands, with about a third of the market.

"I obviously would wish to list (on the mainland) today," Wong Wai Ming, Lenovo's chief financial officer, said at the Reuters China Investment Summit.

"Knowing Lenovo's market share on the mainland, it makes a lot of sense and we would follow that issue very closely. We need to look at the possible impact on our operations."

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Lenovo cannot list on the mainland in its current form as the government forbids overseas-headquartered companies from listing on the Shanghai or Shenzhen stock exchanges.

The PC maker's headquarters are in North Carolina, having moved there in 2006 after completing its purchase of IBM's laptop PC arm.

But the government is in the process of changing the rules to allow foreign-headquartered companies to list on the mainland, prompting a flood of companies that do major business in the local market to say they would seek such a listing.

Hopes for 2010

Commenting on Lenovo's business prospects abroad, Wong said: "There is no reason for me to believe that we cannot return to a profit in mature markets by the end of the financial year (to March 31). We're working toward that."

Lenovo's global peers such as Dell have said they are betting on a strong replacement cycle from 2010 as companies replace PCs that are still running on older versions of Windows.

Lenovo's losses in the past three reporting quarters have primarily been due to its weakness in mature markets, and a recovery there would help the company return to profitability.

Many analysts and PC makers have been hopeful that Microsoft's launch of its next-generation Windows 7 operating system will also help push up overall PC sales, but Wong said many companies remained sensitive to extra costs.

"Many CFOs will not increase capital spending just because the economy seems to be doing better now," he said.

With Nokia's impending launch of a low-cost netbook PC, Wong said he believed the PC and cell phone markets were in the process of converging, and Lenovo was watching the trend closely. "I don't know what you want to call it, the phone or a phoneputer, but really you see the two converging," he said.