(Yicai Global) Nov. 5 -- Lenovo Group did not revoke its application to list on Shanghai’s Nasdaq-like Star Market because of insufficient investment in research and development, according to the chairman of the world’s largest maker of personal computers.

Yang Yuanqing told a press conference yesterday that to list on the tech-heavy board a company has to spend at least CNY60 million (USD9.37 million) a year on R&D, while Lenovo annually invests CNY10 billion (USD1.56 billion). It also requires applicants to own at least 10 patents, and Lenovo has more than 20,000, he said.

At the start of last month, Lenovo filed and pulled its application for the secondary listing within the space of a week, sparking concern among investors. At the time, the Beijing-based firm said it made the decision after considering the market situation and because the financial data in its prospectus could become invalid during the review process due to the firm’s complex business scale.

The Paper reported the day after, on Oct. 9, that Lenovo was not qualified to list on the Star Market because its R&D investment as a percentage of its revenues was less than 3 percent, whereas the Star Market’s rules require a figure of at least 5 percent.

R&D spending jumped 57 percent to USD480 million in Lenovo’s second quarter, representing 2.7 percent of revenue, its earnings report showed yesterday. Net profit soared 65 percent from a year ago to USD512 million, while revenue rose 23 percent to USD17.9 billion.

Yang also said yesterday that Lenovo made it clear last year that the company would double its R&D spending over the next three years.

The firm’s shares [HKG: 0992] closed 2.9 percent lower today at HKG8.06 (USD1.04) each. The benchmark Hang Seng Index came off 1.4 percent.

Editor: Peter Thomas