Chinese phonemaker Xiaomi seeks up to $ 6 billion in IPO
SEOUL, South Korea — Chinese smartphone maker Xiaomi Corp. plans to raise up to $ 6 billion in one of the biggest global stock market debuts in recent years as it tries to become a worldwide hardware- and- services brand alongside Apple, Google and Amazon.
The initial public offering in Hong Kong would value the Beijing- based company at as much as $ 70.3 billion, according to details released Saturday.
Xiaomi will raise less than the $ 10 billion industry observers had expected, which would have valued the company at $ 100 billion. But it will still be among the biggest tech IPOs since Chinese e- commerce giant Alibaba raised $ 21.8 billion in 2014.
Xiaomi shares will start trading on Hong Kong’s stock exchange on July 9 under the ticker of 1810. HK, after the public offering of 2.2 billion shares to institutional investors next week at an offer price between 17 and 22 Hong Kong dollars ($ 2.20-$ 2.80) per share.
The 8- year- old company, which also makes robot vacuum cleaners, air purifiers and TVs, is a star among Chinese unicorns, a term referring to startups valued at more than $ 1 billion. It unseated Samsung Electronics in the Indian smartphone market and Apple in China. It is also one of the few Chinese companies that succeeded in global markets such as India while making fans in places like South Korea.
The IPO means Xiaomi, a self- described internet company, is stepping up its game in the international market while trying to invent a new business model that works overseas. Its first challenge would be to reduce its revenue reliance on smartphone sales, which accounted for 70 percent of the company’s revenue in 2017, by increasing revenue from other gadgets and internet services.
During a news conference ahead of the public offering, Xiaomi chief executive Jun Lei described the company’s business as part Samsung, part Google and part Amazon, consisting of sales of hardware prod- ucts, internet services and e- commerce.
“We are one of a kind,” Lei, one of the richest people in China, told reporters, standing before a presentation that described Xiaomi as “a new species.”
But he offered few details about how such a business model will work outside China and how the company plans to increase revenue from internet services.