Xiaomi files for largest Chinese tech IPO since 2014

03 May, 2018, 10:09 | Author: Devin Moran
  • Xiaomi files for largest Chinese tech IPO since 2014

Xiaomi, which is expected to reach a value of about US$10 billion through the IPO, will become one of the top tech firms by market value. Xiaomi did not disclose any details about the IPO, only saying that the IPO will take place in Hong Kong. It's a big win for Hong Kong Exchanges & Clearing Ltd., whose officials spent years pushing to scrap a ban on the weighted voting rights that give founders control even with minority ownership. Xiaomi is also likely to be among the first Chinese tech firms seeking a secondary listing in its home market, using the planned China depositary receipts route, two people with knowledge of the matter said.

That could make Xiaomi's IPO rival Alibaba's $25 billion debut in 2014 in NY.

For the latest news from the South China Morning Post download our mobile app. The new rules, which were controversial from the outset, appear to have paid off. "There needs to be not one Xiaomi but 100 Xiaomis, maybe even more, to build a rich and prosperous new business ecosystem".

According to Xiaomi's application, its shareholding structure will comprise class-A shares and class-B shares. That puts it in fourth spot globally behind Samsung, Apple and Huawei, both by market share and by actual shipment.

Yet margins on its smartphones are razor-thin.


Its 2017 revenue surged by 67.5% to 114.6 billion yuan ($18 billion), with overseas sales more than tripling to 32.1 billion yuan.

Operating profit for 2017 was 12.22 billion yuan, up from 3.79 billion yuan a year ago. Xiaomi, reporting detailed financials for the first time, posted a net loss of 43.9 billion yuan in 2017, reversing from a meager profit a year earlier.

In terms of markets, China is the company's biggest market and India is its most successful worldwide operations.

Excluding preferred stocks and other items, Xiaomi's adjusted net profit nearly tripled to 5.4 billion yuan, from 1.9 billion yuan in 2016. Xiaomi's business also includes also partnering with "Internet of Things" companies to develop hundreds of connected lifestyle devices like rice cookers, robot vacuum cleaners and coffee makers.

Another 30 per cent of the funds will be used for research and development, while 30 per cent will be used on global expansion, according to Xiaomi's filing. It had kept 10% of the funds for working capital.

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