Chinese smartphone maker Xiaomi has kicked off what is expected to be the world’s biggest initial public offering (IPO) of shares in years after it filed documents with Hong Kong’s stock exchange. / AFP PHOTO
HONG KONG, China (AFP) — Chinese smartphone maker Xiaomi on Thursday kicked off what could be the world’s biggest initial public offering (IPO) for four years as it takes advantage of the listing rule in Hong Kong.
Xiaomi submitted a heavily redacted filing to the Hong Kong exchange late Wednesday laying out its financial details and setting the stage for a full announcement.
The papers, which appeared on the Hong Kong bourse’s website, did not indicate how much Xiaomi is potentially looking to raise but Bloomberg News, citing people close to the matter, said it was expected to be worth at least $10 billion and could value the business at as much as $100 billion.
That would make it the biggest new listing in the world since Chinese giant Alibaba’s $25-billion debut in 2014 in New York.
The offering would mark a coup for Hong Kong, which was said to be vying with New York and Shanghai for Xiaomi’s listing after being dealt a blow by losing out on Alibaba.
In a bid to make the city more attractive, Hong Kong authorities last month announced they would allow companies with dual voting rights to list.
Several global corporate titans such as Facebook have different share classes that give stronger voting rights to founders in order to protect their influence even after going public.
Exchange head Charles Li said at the time that there were a number of firms lining up to list in light of the changes.
The statement on Wednesday also showed revenue for Xiaomi surged 67.5 percent in 2017.
It was accompanied by a bullish-sounding letter from the company’s founder and chairman Lei Jun saying Xiaomi intends to become a “part of the lives of billions of people globally in the future”.
James Yan, an analyst at Counterpoint, said: “Investors will like Xiaomi’s business model because growing user numbers guarantee profits in the future.
“A bigger hardware user base will translate to stronger profitability from services and at the ecosystem end.”
Xiaomi announced in a press conference on Thursday that it will link up with Li Ka-shing’s CK Hutchison to sell its products — from mobile phones to household goods — in Hong Kong and beyond through the retail giant’s international network.
“I believe buying things with good quality and cheap prices is the universal value shared by everyone,” said Xiang Wang, Senior Vice President of Xiaomi.
“Our expansion overseas is borderless.”
— Bloomberg News contributed to this —
© Agence France-Presse