National Business Daily (NBD), a Chinese national daily newspaper which reports business news, recently reported that the Hong Kong Hang Seng Index announced on May 4 that it would remove Lenovo from its index of constituent stocks. Since Lenovo was included in Hang Seng’s index of constituent stocks in 2013, Lenovo has lost 56 percent of its value. According to Bloomberg, of 171 global technology stocks, Lenovo had the worst stock performance. In the past five years, it appears the Lenovo Group could not manage to sustain a healthy growth in its core business of PC manufacturing as well as the growth of its business of mobile devices. A large number of competitors in China grew at a much faster pace. In 2017, on a global level, the U.S. company HP took back its number one PC manufacturer title from Lenovo. As the Motorola brand owner, Lenovo was China’s number one smartphone vendor in 2014. However, by the end of 2017 Lenovo had only one percent of China’s smartphone market share. Lenovo responded to press inquiries saying the company is entering a new growth era, and Hang Seng’s poor rating will not have a concrete long term negative impact.
Source: National Business Daily, May 5, 2018