XIAOMI ANNOUNCES PIONEERING IPO PLAN
Company to issue securities on Shanghai Stock Exchange in addition to HK primary listing
SMARTPHONE maker Xiaomi yesterday became the first Chinese company to announce plans to issue securities on mainland China markets under a trial programme aimed at encouraging the country’s tech giants to list at home.
Xiaomi, one of the world’s largest smartphone manufacturers that is planning a primary listing in Hong Kong, said in a regulatory filing it would also issue Chinese Depositary Receipts (CDRs) on the Shanghai Stock Exchange.
After watching technology heavyweights Alibaba and Baidu list on Wall Street, Chinese authorities have devised a programme under which companies listed outside the country can simultaneously list CDRs at home.
The objectives of the plan include helping to develop China’s still relatively immature and volatile share markets while allowing domestic investors to invest in the country’s big tech champions.
The China Securities Regulatory Commission finalised the rules governing the trial programme last week, but it remains unknown when it could start.
Alibaba and Hong Kong-listed Tencent have expressed interest in the plan.
Xiaomi’s filing said the CDRs would be listed at the same time as its main debut in Hong Kong, with its initial public offering expected to raise US$10 billion (RM39.9 billion), valuing it at US$100 billion.
That could make it the world’s biggest IPO since Alibaba’s US$25 billion debut in 2014 in New York.
Xiaomi provided no specifics on the number of CDRs to be issued or a timetable. But it said 40 per cent of the funds raised through CDRs would go to global expansion and the rest on product development and expansion of its mobile Internet ecosystem.
Meanwhile, Xiaomi recorded a first-quarter net loss of seven billion yuan (RM4.35 billion), according to a filing.
That compared with a net loss of 43.89 billion yuan for the whole of last year, according to its draft prospectus for the CDRs.
When one-off items were excluded, Xiaomi said it made a net profit of 1.04 billion yuan in the first quarter, compared with 3.9 billion yuan for the whole of last year.