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Will Lenovo Go Public In 2K14?
Lenovo’s parent firm Legend Holdings could float an initial public offering (IPO) as soon as 2014, according to the firm’s chairman.
Liu Chuanzhi, chairman of Legend Holdings told China Business News that the firm plans to list on the China A-share market between 2014 and 2016. Chuanzhi also reportedly said the company will invest $3.2bn by 2014 to develop its various businesses.
Legend Holdings is 36 percent owned by the Chinese state controlled Academy of Sciences, with a further 20 percent owned by the private investment firm China Oceanwide Holdings Group.
Legend Holdings also has venture capital and real estate interests outside of Lenovo Group. The firm’s system building operations however have gone from strength to strength since it bought IBM’s PC business back in 2005, and it is now heavily promoting its Yoga tablet-laptop hybrid device.
Earlier this year Gartner reported that Lenovo had overtaken HP to become the largest PC vendor, something that HP disputed by offering IDC’s figures. Regardless of HP’s protestations then, Lenovo is set to overtake HP as its PC business continues to grow while HP’s has been shrinking for some time.
Legend Holdings might want to cash in on Lenovo’s high flying status and a cash injection from an IPO could help the company invest in designing products for the smartphone and tablet markets.
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Lenovo On The Rise
Lenovo has topped off a great 2012 with record sales figures and revenues, and claimed it took 15.6 percent of the PC market.
Lenovo is the PC maker that has bucked the industry trend of a shrinking PC market, posting faster than average industry growth for 14 consecutive quarters. All of that has left the firm announcing an 11 percent increase in second fiscal quarter sales to $8.7bn with profits of $162m, an increase of 13 percent over the same period last year.
Lenovo has managed to maintain the legendary status held by IBM’s Thinkpads and introduce its own low-cost models aimed at consumers. The firm has also been pushing smartphones in China and close to half of its revenues in its second fiscal quarter came from its home market.
Yang Yuanqing, chairman and CEO of Lenovo said, “Our global PC market share reached another historic high, moving us closer to our dream of becoming the worldwide PC leader. With four years’ effort, our consumer PC business has become the world’s number one in this segment for the first time. Our smartphone business in China, which we started only two years ago, has again strengthened its number two position,”