Xiaomi's sales surge while it files for potentially the largest-ever IPO

Chinese smartphone maker Xiaomi files for IPO

Chinese smartphone maker Xiaomi files for IPO

Xiaomi, one of the world's leading smartphone makers, has filed to go public in Hong Kong in what could be the biggest IPO in almost four years.

The filing implies that Xiaomi will take advantage of hongkong rules that allow businesses to problem high insiders stocks as well as shares with reduced voting-rights into the general public. The exchange operator had modified its regulations to accommodate such companies after losing Alibaba's dual-class listing to NY because rules at the time only allowed a single share class.

Xiaomi also plans on shipping at least 100 million smartphones this year, and that is certainly an ambitious goal because the company did not sell close to the above-mentioned number back in 2017.

Operating profit for 2017 was CNY 12.22 billion, up from CNY 3.79 billion a year ago. It was the fourth-largest smartphone manufacturer by market share in China previous year, according to Counterpoint.

"As far as we know, apart from Xiaomi, there has never been another smartphone company that has successfully rebounded after a decline in sales", he wrote.

Two separate people said the company's valuation would likely be lowered to a bit above US$70 billion.

Meituan Dianping Chinese tech giant
Meituan-Dianping likes to call itself the"Amazon of services

A wave of huge tech companies in China is considering filing for IPOs over the next year, including Ant Financial the online payments behemoth. For Q4 2017, Xiaomi grabbed the top position for smartphone shipments in India and in Q1 2018 was number four globally.

Xiaomi is one of the fastest growing tech companies and boasts India as one of its key markets. Xiaomi was the fastest growing brand in China during the quarter.

Hong Hao, Head of Research of Bank of Communications (International), said that the size of Xiaomi's IPO will have a certain impact on the capital market. The WVR give greater power to founding shareholders even with minority shareholding.

"We are building an open global ecosystem, and not a walled garden", said Lei, who with co-founder Lin Bin will continue to control the post-IPO company through a special class of shares.

According to Xiaomi's application, its shareholding structure will comprise class-A shares and class-B shares. Lei now owns 31.4 per cent of Xiaomi while Lin holds 13.3 percent.

CLSA, Goldman Sachs Group Inc and Morgan Stanley are joint IPO sponsors.

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