Jun 21, 2018 06:00 PM

Xiaomi Cuts Listing Goal to $6.1 Billion After Delaying Mainland Sale

A shopper leaves a Xiaomi store in Beijing on Wednesday. Photo: IC
A shopper leaves a Xiaomi store in Beijing on Wednesday. Photo: IC

* Xiaomi had wanted to raise up to $10 billion in total in Hong Kong and mainland listings.

* Company now plans to offer 2.18 billion shares priced from HK$17 ($2.10) to HK$22 in Hong Kong.

(Beijing) — Smartphone-maker Xiaomi Corp. aims to raise up to $6.1 billion in its upcoming Hong Kong initial public offering, scaling back its previous plan to raise as much as $10 billion in the region and the Chinese mainland.

Xiaomi held a roadshow on Thursday to prepare for the Hong Kong listing, offering 2.18 billion shares to investors priced from HK$17 ($2.17) to HK$22 per share, according to a company document viewed by Caixin.

Around 10% of publicly traded shares — worth $548 million — will go to seven cornerstone investors, meaning its stock market debut next month could be worth around $5.48 billion.

The cornerstone investors include state-owned telecommunications giant China Mobile Ltd., China Development Bank, logistics firm SF Express and U.S. chipmaker Qualcomm Inc., which has offered to buy between $28 million and $192 million worth of shares.

After the deal, SF Express, which unlike China Mobile and Qualcomm already has a direct partnership with Xiaomi, will take over the company’s logistics businesses, an SF Express source told Caixin.

Xiaomi is now widely expected to be valued between $55 billion and $70 billion.

The Beijing-based smartphone-maker previously planned to raise around $10 billion through a dual offering on both the mainland and Hong Kong. But the firm on Tuesday said its plan to sell at least half of its shares through Chinese depositary receipts (CDRs) on the mainland will be postponed until after its listing.

Xiaomi had been expected to be the first Chinese company to issue CDRs through a pilot program that aims to attract high-tech companies, particularly those listed overseas, to the mainland market by allowing them to bypass domestic legal and technical barriers.

Xiaomi asked for a CDR pricing that was judged to be unacceptably high by the China Securities Regulatory Commission, the country’s securities regulator, leading to Xiaomi’s decision to put the plan on hold, according a market source close to the regulator.

The CDR issue has weighed on the pricing of the company’s Hong Kong listing, according to a source from the company’s underwriter. The source added that more than 10 international financial institutions have tried to push down the company’s valuation, with some even going as far as pushing it under $50 billion.

The pricing of the company has proved controversial, with sources telling Caixin that the firm’s valuation has exceeded market expectations. Investment banks have valued Xiaomi at 27 to 34 times projected 2019 earnings. By comparison, Apple Inc. — the world’s most valuable company with a market capitalization of $932 billion — has a multiple of 14.5.

The headline has been corrected to show that Xiaomi has delayed its mainland stock sale.

Contact reporter Mo Yelin (

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