Xiaomi to file for IPO in HK next month

The Star Malaysia - StarBiz - - Front Page -

BEI­JING: Xiaomi Corp has picked China’s Citic Se­cu­ri­ties to han­dle its is­suance of Chi­nese de­posi­tary re­ceipts as the smart­phone maker pre­pares to file for an ini­tial pub­lic of­fer­ing in Hong Kong, peo­ple fa­mil­iar with the mat­ter said.

The Bei­jing-based com­pany may file for a pub­lic list­ing as soon as next month and is tar­get­ing a val­u­a­tion of about US$100bil, said one of the peo­ple, ask­ing not to be iden­ti­fied be­cause the mat­ter is pri­vate. The CDR is most likely to come af­ter the IPO in Hong Kong and its size is yet to be de­cided, said the per­son.

Xiaomi could be the big­gest IPO since Alibaba Group Hold­ing Ltd’s US$25bil de­but in 2014. The smart­phone maker, which once fetched a val­u­a­tion of US$45bil, suf­fered through a chal­leng­ing 2016 and then bounced back by re­vamp­ing its sales model and ex­pand­ing in In­dia, where it ri­vals Sam­sung Elec­tron­ics Co as the big­gest ven­dor. Xiaomi has cho­sen Mor­gan Stan­ley, Gold­man Sachs Group Inc, Credit Suisse Group AG and Deutsche Bank AG for its IPO, peo­ple fa­mil­iar with the mat­ter have said.

Xiaomi de­clined to com­ment on its list­ing plans. A rep­re­sen­ta­tive for Citic didn’t re­spond to a re­quest for com­ment.

China’s gov­ern­ment has en­cour­aged its tech­nol­ogy com­pa­nies to is­sue CDRs so that cit­i­zens will be able to in­vest in the coun­try’s fastest-grow­ing com­pa­nies. Its bright­est stars, in­clud­ing Alibaba and search giant Baidu Inc, have cho­sen to de­but in New York be­cause of the more flex­i­ble reg­u­la­tions and abun­dant cap­i­tal abroad. Fi­nal rules for CDRs have yet to be worked out, which may de­lay Xiaomi from is­su­ing shares in main­land China at the same time as Hong Kong.

With CDRs, com­pa­nies that al­ready trade on over­seas ex­changes, in­clud­ing Alibaba and Ten­cent Hold­ings Ltd, would is­sue se­cu­ri­ties that could be pur­chased in main­land China. The coun­try un­veiled a pilot pro­gramme ear­lier this month, aim­ing to bring back the most valu­able over­seas-listed gi­ants.

Xiaomi’s co-founder and chief ex­ec­u­tive of­fi­cer Lei Jun hailed CDRs as “an ex­cel­lent idea” in a re­cent in­ter­view with Bloomberg News, call­ing it “a great pol­icy in­no­va­tion.”

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