Chinese smartphone maker Xiaomi goes public, looks to raise $10 billion

Hong Kong: Stocks end week with sharp losses

The smartphone manufacturer will be the first major company to go public in that country since rule changes allow for the listing of different share classes on the Hong Kong Exchange.

While the application omitted financial terms, bankers familiar with the plan said the Beijing-based company is seeking to raise US$10 billion, in a sale that values the eight-year-old firm at US$100 billion. Revenue, though, soared 67.5% to 114.5 billion yuan ($18 billion USD) a year ago. It also said it made a net loss of 43.89 billion yuan versus a profit of 491.6 million yuan in 2016. The wide spectrum of products includes air purifiers, rice cooker, wearables, electric scooter, Mi TV, Mi Drone and etc. Xiaomi said it registered a revenue of 23.5 billion yuan past year from its ecosystem.

Xiaomi doubled its shipments in 2017 to become the world's fourth-largest smartphone maker, according to Counterpoint Research, defying a global slowdown in smartphone sales. By the end of a year ago, Xiaomi had topped Samsung Electronics Co.to lead sales charts in India. Xiaomi has portrayed a consolidated image in the emerging markets and now it is looking forward to entering developed markets for smartphones.

If confirmed, a share offering in the former British colony would be a coup for Hong Kong, which was said to be vying with NY and Shanghai for Xiaomi's listing.

Xiaomi's main business is phones, but it also makes a range of other internet-connected devices, including laptops and even smart rice cookers. Those targets, if achieved, will make it the biggest Chinese tech IPO since Chinese internet giant Alibaba Group Holding Ltd raised United States dollars 21.8 billion in 2014.

Hong Kong: Stocks end week with sharp losses

To compete with regional bourses, Hong Kong pushed through rules to let pre-revenue biotechnology firms and technology firms with multiple classes of stocks sell equity.

The company has apparently invested heavily in the past year leading up to the IPO.

Xiaomi's 2017 sales jumped by two-thirds to 114.6 billion yuan, with overseas revenue more than tripling to 32.1 billion yuan, its filings show.

The company said it would have a "weighted voting rights structure", where class A share holders exercise 10 votes while holders of class B shares exercise one vote.

The exchange is eyeing several tech listings that are expected in the coming two years from Chinese firms with a combined market cap of $500 billion.


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