(Yicai Global) Oct. 11 -- Lenovo Group’s shares sank after the world's largest maker of personal computers said it will not proceed with a secondary listing in Shanghai.

Lenovo’s shares [HKG:0992] ended 13.4 percent lower in Hong Kong trading today at HKD7.64 (98 US cents) apiece, after earlier sinking by as much as 17.7 percent.

The Beijing-based company made the announcement late yesterday, just eight days after its application to list on Shanghai’s Nasdaq-like Star Market was accepted. Lenovo said it withdrew the application after considering the market situation and because the financial data in its prospectus may become invalid during the review process due to the firm’s complex business scale.

Lenovo started preparing to list in the Chinese mainland last year, and made the announcement on Jan. 12, causing its shares in Hong Kong to soar over 15 percent in the following two trading days. It planned to sell 1.34 billion Chinese depositary receipts to raise CNY10 billion (USD1.6 billion).

The SSE said on Oct. 8 that it had terminated the vetting process after Lenovo and its sponsor, China International Capital Corporation, applied to pull the listing.

The company’s businesses are well operated, and the withdrawal will not have an adverse impact on its financial status, Lenovo said, adding that if there is any significant update regarding the listing, it will release another announcement at the appropriate time.

Lenovo was not qualified to list on the Star Market, the Paper reported on Oct. 9, citing experts. The online news outlet also added that the firm’s research and development expenses account for less than 3 percent of the total, while the Star Market’s rules require a figure of at least 5 percent. It planned to use 45 percent of the new funds for re-investment and as a supplement to circulating assets, while the Star Market requires the funds to be allocated to tech innovation, the Paper said.

Lenovo’s debt-to-assets ratio has stayed at about 90 percent over the past three years. Its overall assets are seen as lower than expected, as over CNY30 billion (USD4.7 billion) worth of assets, which include Motorola and NEC’s PC business, are categorized as goodwill.

Editor: Futura Costaglione