Beijing-based computer giant Lenovo Group will be excluded from the Hang Seng Index starting from June 4, the Hang Seng Indexes Co said in a statement on its website on Friday.
The Lenovo Group will be replaced by the pharmaceutical giant CSPC Pharmaceutical Group, so the number of constituents of the Hang Seng Index will remain at 50, the statement showed. The Hang Seng Indexes Co didn't explain the change.
But Bloomberg News reported on Friday that Lenovo's shares have plunged by 57 percent since it was included in the Hang Seng Index in March 2013, as the company has been struggling to revive its business in the mobile phone sector.
According to a report from domestic big data company QuestMobile on April 18, only a meager 0.6 percent of domestic mobile phone users were using Lenovo devices as of the end of March, far behind other domestic phone brands like Xiaomi and Huawei.
Apart from the mobile phone sector, the company is also slipping back in other areas. A report compiled by the International Data Corp in January showed that Lenovo accounted for 21.1 percent of the global portable computer market in terms of shipments in 2017, the first time it slipped to the second place since 2013. In 2017, U.S.-based HP Inc was the world leader in portable computer shipments.
The Bloomberg report also suggested that exclusion of the company from the Hong Kong stock exchange could trigger more capital outflows from Lenovo.
The Lenovo Group's shares rose by 0.54 percent on Friday.