Yunkang Group Limited — Major Shareholding Notification 2007

May 8, 2007

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities. This announcement is not an offer of securities for sale in the United States.

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(Incorporated in Hong Kong with limited liability) (Stock Code: 0992)

ANNOUNCEMENT

Placing of Existing Shares by Substantial Shareholder

The Company has been informed by Citigroup Global Markets Asia Limited, the disposition agent of IBM, that it has placed 222,861,308 Shares to investors at a placing price of HK$2.92 per Placing Share.

The Placing Shares represent approximately 2.62% of the existing issued ordinary share capital (comprising Shares only) and 2.51% of the existing issued ordinary share capital (comprising Shares and Non-voting Shares) of the Company.

Upon completion of the placing, IBM’s interests in the Company will be reduced to 409,009,207 Shares and 375,282,756 Non-voting Shares, the aggregate represent 8.82% of the existing issued ordinary share capital (comprising Shares and Non-voting Shares) of the Company while the 409,009,207 Shares represent approximately 4.80% of the existing issued ordinary share capital of the Company (comprising Shares only).

This announcement is made pursuant to Rule 13.09 of the Listing Rules.

PLACING OF EXISTING SHARES BY IBM

The Company has been informed by Citigroup Global Markets Asia Limited, the disposition agent of IBM on May 8, 2007 that it has placed 222,861,308 Shares beneficially owned by IBM to investors at a placing price of HK$2.92 per Placing Share.

Placing Shares:

The Placing Shares formed part of the consideration paid by the Company to IBM relating to the very substantial acquisition by the Company of the global desktop computer and notebook computer business of IBM. The Placing Shares relate to 222,861,308 Shares representing approximately 2.62% of the existing issued ordinary share capital of the Company (comprising Shares only) and approximately 2.51% of the existing issued ordinary share capital of the Company (comprising Shares and Non-voting Shares).

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IBM is a substantial shareholder of the Company and currently holds 631,870,515 Shares and 375,282,756 Non-voting Shares; the aggregate represents approximately 11.32% of the existing issued ordinary share capital of the Company (comprising Shares and Non-voting Shares). The shareholding structure of the Company as at May 8, 2007 is set out below.

				Number of Shares			Number of Shares	Number of Shares
	Number of Shares			assuming full				assuming full
	(excluding			conversion of the				conversion of
	Non-voting			Non-voting Shares		both the Non-voting
	Shares and			and excluding the				Shares and the
	Convertible	Percentage of		Convertible	Percentage of			Convertible	Percentage of
Shareholders	Preferred Shares)	voting rights		Preferred Shares	voting rights		Preferred Shares		voting rights
Legend Holdings	4,198,547,971		49.28	4,198,547,971		47.20		4,198,547,971		42.43
IBM	631,870,515		7.42	1,007,153,271		11.32		1,007,153,271		10.18
Convertible Preferred
Shares holders	–		–	–		–		1,001,834,862		10.12
Directors	61,796,350		0.73	61,796,350		0.70		61,796,350		0.62
Public	3,627,016,186		42.57	3,627,016,186		40.78		3,627,016,186		36.65
Total	8,519,231,022		100	8,894,513,778		100		9,896,348,640		100

Upon completion of the placing, IBM’s interest in the Company will be reduced to 409,009,207 Shares and 375,282,756 Non-voting Shares, the aggregate represents approximately 8.82% of the existing issued ordinary share capital of the Company (comprising Shares and Non-voting Shares) while the 409,009,207 Shares represent approximately 4.80% of the existing issued ordinary share capital of the Company (comprising Shares only). The shareholding structure of the Company upon completion of the placing is set out below.

				Number of Shares			Number of Shares	Number of Shares
	Number of Shares			assuming full				assuming full
	(excluding			conversion of the				conversion of
	Non-voting			Non-voting Shares		both the Non-voting
	Shares and			and excluding the				Shares and the
	Convertible	Percentage of		Convertible	Percentage of			Convertible	Percentage of
Shareholders	Preferred Shares)	voting rights		Preferred Shares	voting rights		Preferred Shares		voting rights
Legend Holdings	4,198,547,971		49.28	4,198,547,971		47.20		4,198,547,971		42.43
IBM	409,009,207		4.80	784,291,963		8.82		784,291,963		7.93
Convertible Preferred
Shares holders	–		–	–		–		1,001,834,862		10.12
Directors	61,796,350		0.73	61,796,350		0.70		61,796,350		0.62
Public	3,849,877,494		45.19	3,849,877,494		43.28		3,849,877,494		38.90
Total	8,519,231,022		100	8,894,513,778		100		9,896,348,640		100

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Placees:

The Company has been confirmed by Citigroup Global Markets Asia Limited that the placees of the placing are independent investors who are not connected persons of the Company.

Placing Price:

The placing price is HK$2.92 per Placing Share, representing a discount of approximately 6.7% to the closing price of HK$3.13 per Share as quoted on the Stock Exchange on May 8, 2007.

Completion:

Completion of the placing is currently expected to take place on May 10, 2007.

Listing Rules:

This announcement is made pursuant to Rule 13.09 of the Listing Rules.

DEFINITIONS

“Board”	board of Directors of the Company
“Company”	Lenovo Group Limited, a company incorporated on October 5, 1993
	with limited liability under the laws of Hong Kong, the Shares of which
	are listed on the main board of the Stock Exchange
“connected person”	has the meaning set out in the Listing Rules
“Convertible Preferred Shares”	Series A Cumulative Convertible Preferred Shares of nominal value of
	HK$9.175 each and stated value of HK$1,000 each in the share capital
	of the Company
“Directors”	the directors of the Company
“HK$”	Hong Kong Dollars, the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“IBM”	International Business Machines Corporation
“Listing Rules”	Rules Governing the Listing of Securities on the Stock Exchange
“Non-voting Share(s)”	ordinary non-voting share(s) of par value of HK$0.025 each in the
	ordinary share capital of the Company
“Placing Shares”	222,861,308 Shares beneficially owned by IBM
“PRC”	the People’s Republic of China

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“Share(s)”

ordinary shares of par value HK$0.025 each in the share capital of the Company which do not include the Non-voting Shares

• “Stock Exchange”

The Stock Exchange of Hong Kong Limited

“substantial shareholder”

has the meaning set out in the Listing Rules

By order of the Board Yang Yuanqing Chairman

Raleigh, May 8, 2007

As of the date of this announcement, the Executive Directors are Mr. Yang Yuanqing, Mr. William J. Amelio and Ms. Ma Xuezheng, the Non-executive Directors are Mr. Liu Chuanzhi, Mr. Zhu Linan, Mr. James G. Coulter, Mr. William O. Grabe, Mr. Shan Weijian, Mr. Justin T. Chang (alternate Director to Mr. James G. Coulter), Mr. Vince Feng (alternate Director to Mr. William O. Grabe) and Mr. Daniel A. Carroll (alternate Director to Mr. Shan Weijian); and the Independent Non-executive Directors are Mr. Wong Wai Ming, Professor Woo Chia-Wei, Mr. Ting Lee Sen and Mr. John W. Barter III.

“Please also refer to the published version of this announcement in the South China Morning Post”

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