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Daily Trends Now


China's Xiaomi submits HK filing, with big IPO expected

China's Xiaomi submits HK filing, with big IPO expected

Chinese smartphone maker Xiaomi filed documents today with Hong Kong's stock exchange operator for an initial public offering that could be the world's biggest share sale in years.

The listing is expected to raise about USD 10 billion via the public offering, giving Beijing-based Xiaomi a market value of between USD 80 billion and USD 100 billion, people familiar with the plans told Reuters. While some investors opposed the move, Xiaomi's decision, four years after Alibaba Group Holding Ltd. chose NY, signals a new phase for the city in its ambitions to rival the USA market.

The company's financials showed 2017 revenue of RMB 114.62 billion ($18 billion), a 67.5% increase from the previous year. It posted a net loss of 43.9 billion yuan ($6.9 Billion) in 2017, reversing from a profit of 491.6 million yuan a year earlier.

The company said 28 percent of its revenue came from global operations in 2017, compared to 13.4 percent in 2016 and 6.1 percent in 2015.

Still, CEO Lei Jun emphasized in his open letter that following the declining smartphone sales in 2016, his company went through a transition and managed to rebound in 2017 - going from 55.4 million devices back up to 91.4 million, with a stronger focus on developing markets like India and Indonesia. He personally took charge of the supply chain and ramped up investments in dozens of businesses that made everything from fitness monitors, luggage, water purifiers, rice cookers and personal scooters.




It's a big win for Hong Kong Exchanges & Clearing Ltd., whose officials spent years pushing to scrap a ban on weighted-voting rights, which give founders and executives control even with minority ownership.

While Xiaomi continued to expand its product portfolio to include more smart home devices and lifestyle products, it had also been working hard on expanding its physical presence around the world.

The tech firm is also expected to issue Chinese depository receipts (CDRs) after it goes public. The exclusive tie-ups with online stores held Xiaomi back from reaching many less tech-savvy customers in China. They have also been in talks with the U.S carriers to bring Xiaomi to the American market. It sold investors on a promise that it was not just a smartphone maker, but that it would use phones as a mechanism to sell services and ads to customers.

Xiaomi is a lot more than a smartphone company.

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