Chinese smartphone giant Xiaomi’s Hong Kong IPO will launch in July
The world’s No 4 smartphone maker will go on the road by end-June to persuade US and European institutional investors to value Xiaomi at no less than US$70 billion
Xiaomi, the world’s fourth-largest smartphone maker, is putting the finishing touches on a plan to make its US$10 billion initial public offer available to investors by early-to-mid July, presenting the biggest global stock offer of 2018 as a birthday present of sorts to Hong Kong’s stock market.
The Beijing-based company will go on a roadshow by the end of June to persuade institutional investors in the United States and Europe to value its business at no less than US$70 billion, according to a person familiar with Xiaomi’s plans.
The valuation of Xiaomi’s business, which went from a start-up to surpass 100 billion yuan (US$16 billion) in seven years, is based on the projection that its annual profit growth will top 50 per cent in the next three years through 2020, the person said.
“Investors should evaluate tech companies by the size of their market, the current market position, projected growth in the next five to 10 years, and where their founders or management teams can lead them to in the future,” said Chen Xiaohong, founder of China-focused venture fund H Capital, who doesn’t own any stakes in Xiaomi.
A US$10 billion IPO, the biggest in the global pipeline for 2018, would hurtle Hong Kong to the pole position in the race to be the destination of choice for global companies seeking to raise capital. Hong Kong, which marks the 21st anniversary of the city’s return to Chinese sovereignty on July 1, fell to fourth position in the worldwide IPO stakes last year, overtaken by Shanghai and Shenzhen for the first time.