With Xiaomi’s deflated IPO, can Hong Kong live up to the hype of a market for new economy listings?
Amid the US-China trade war and current market sell-off, Chinese unicorns are rethinking their valuations and holding off listings till later this year, say analysts
When shares of Xiaomi, the world’s fourth-largest smartphone maker, trade on Monday, will they deliver a performance strong enough to wipe off the blemish of a disappointing subscription demand and weak pricing for the initial public offering?
The slash in valuation to US$54 billion, just more than half the US$100 billion that was originally sought, was painful for the eight-year old company founded by Lei Jun, and throws into question for China’s other unicorns the draw of Hong Kong as an IPO market.
Xiaomi was also forced to cut the fundraising amount to US$4.72 billion from the intended size of about US$10 billion, after pricing its stock at HK$17 per share, at the bottom end of the indicative range. Worse still, the company shelved its issue of Chinese depositary receipts after failing to reach an agreement with mainland Chinese regulators over a number of issues, one reportedly being the high valuation.
