China's Xiaomi set to raise $10bn on Hong Kong stock exchange

China's Xiaomi set to raise $10bn on Hong Kong stock exchange

Xiaomi Corp., the world's No. 4 phone maker, has filed for what's expected to be the biggest initial public offering globally since 2014 with a valuation as high as $100 billion, according to people familiar with the matter.

Xiaomi hasn't specified how much money it wants to raise during the IPO but the sources peg the value at somewhere around $10 Billion.

The HKEX just altered its rules with the aim of attracting new tech firm listings on its exchange by introducing dual-class listings, a factor that led to the Alibaba Group Holding Ltd preferring to list their IPO on the New York Stock Exchange.

It's the first major company to announce plans to go public in Hong Kong after its stock exchange pushed through new rules to lure tech firms. 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. Between 2015 and 2017, sales increased by 70% to 114.6bn yuan ($17.9bn), according to the filing.

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China is, as you'd expect, the primary revenue market but Xiaomi is increasingly less dependent on its homeland.

Chinese technology company Xiaomi's IPO application has shed light on the company's finances, showing a rebound from declining sales two years ago to current worldwide growth.

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. Xiaomi also became the smartphone manufacturing company with a maximum market share in the top 50 Indian cities in the Q3 2017. The rest come from selling smart household gadgets - Xiaomi rice cookers, scooters or air conditioners - and internet services like entertainment and financial service apps.

Other recent major China capital markets roles for CC have included the firm's work on the $1.1bn Hong Kong IPO of Tencent Holdings subsidiary China Literature's previous year. "If the net margin exceeds 5%, we will return the excess to our customers", Xiaomi Chairma Le Jun said.

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In the first quarter of 2018, Xiaomi with over 51 per cent growth was at fifth spot in China, Counterpoint Research reported.

It has enlisted Goldman Sachs, CSLA and Morgan Stanley for its proposed listing.

In the opening pages of the application, Xiaomi chairman Lei Jun reveals the company's ambitions - despite being the world's fourth largest smartphone manufacturer, he sees it as more than a hardware firm.

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