A Lenovo employee works at a production facility in Hefei, Anhui province, in March. (ZHOU MU / XINHUA)

Shares of Chinese mainland technology heavyweight Lenovo Group Ltd on the Hong Kong bourse jumped nearly 10 percent to HK$8.83 (US$1.14) on Wednesday, after the company said it planned to issue Chinese depositary receipts on the STAR Market in Shanghai.

The Shanghai Stock Exchange's Science and Technology Innovation Board is also known as the STAR Market.

Lenovo's CDR plan came on the heels of strong sales of personal computers in an environment of remote work, and home-based learning and entertainment that have become the norm due to the COVID-19 pandemic.

In a filing with the Hong Kong bourse on Tuesday, Lenovo said its board has approved the proposed issuance of CDRs.

The Beijing-based company said it intends to issue new ordinary shares that would represent no more than 10 percent of its total enlarged number of ordinary shares.

Proceeds from the issuance will be used for the company's research and development of new technologies, products and solutions, strategic investments in related sectors, and replenishment of its working capital, Lenovo said.

The proposed CDR issuance is subject to market conditions, shareholders' approval and the necessary approvals of the stock exchanges and regulators concerned, Lenovo said.

Yang Yuanqing, chairman and CEO of Lenovo, said the CDR plan will help boost the link between Lenovo's strategies and the robust development of the capital market in the Chinese mainland, which will better unlock the value of Lenovo.

Yang Yuanqing, chairman and CEO of Lenovo, said the CDR plan will help boost the link between Lenovo's strategies and the robust development of the capital market in the Chinese mainland, which will better unlock the value of Lenovo

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Shen Meng, director of boutique investment bank Chanson and Co, said Lenovo has maintained growth over the past year, but the Hong Kong stock market may have undervalued the company.

Lenovo is likely to have a higher valuation on the STAR Market, he said.

Lenovo said in the past two years, its strategy focused on intelligent transformation as it is committed to be the leader and enabler of intelligent transformation in all walks of life.

As the world's largest PC maker, Lenovo recorded a 29 percent year-on-year growth in its global shipments to over 23.1 million units in the fourth quarter of 2020, according to data from International Data Corp, a market research company.

The robust performance has helped Lenovo to further dominate the global PC sector with a market share of 25.2 percent, a new high in its history.

Gianfranco Lanci, president of Lenovo, said: "The COVID-19 pandemic continues to have an impact on both supply and demand. Lenovo, however, has fared, and will continue to fare, better than many in the industry, given our operational excellence and 'global/local model'.

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"Lenovo's operational capability, timely response to the 'work and learn from home' trend, and focus on high-growth and premium segments drove the record performance."

Ryan Reith, program vice-president with IDC's worldwide mobile device trackers, said: "Demand is pushing the PC market forward and all signs indicate this surge still has a (long) way to go.

"The obvious drivers for last year's growth centered around work from home and remote learning needs, but the strength of the consumer market should not be overlooked. We continue to see gaming PCs and monitor sales at all-time highs.

"In retrospect, the pandemic not only fueled PC market demand but also created opportunities that resulted in a market expansion."