Chinese manufacturer Xiaomi has filed to go public in Hong Kong in what could be the biggest initial public offering since Alibaba’s $25billion debut in 2014.
Although the application doesn’t say how much Xiaomi is hoping to raise, Bloomberg reports it’s likely to be at least $10bn, which could value the company at more than $100bn.
According to the news site, the company is taking advantage of changes in the Hong Kong stock market that allow companies with multiple classes of shares to raise capital for the first time.
Typically, companies that offer different types of stock issue two classes, one that has normal voting rights, and one with “super voting” rights that’s usually reserved for founders, executives and other large stakeholders. Put simply, the “super voting” shares allow company insiders to retain control over a business even if they become minority shareholders, although there is no difference in terms of company ownership or profits.
In the opening pages of the application, Xiaomi chairman Lei Jun reveals the company’s ambitions – despite being the world’s fourth largest smartphone manufacturer, he sees it as more than a hardware firm.
“We are more than a hardware company. We are an innovation-driven internet company”, Jun begins. “Xiaomi is an internet company with smartphones and smart hardware connected by an IoT platform at its core. Our mission is to relentlessly build amazing products with honest prices to let everyone in the world enjoy a better life through innovative technology”.
When it revealed detailed financial info for the first time in 2017, Xiaomi posted a net loss of $6.9 billion, despite revenues of $18bn. After seeing falling sales in phones, the company invested in offline retail, building some 200 stores across China. The company has also grown its overseas market, becoming the number one smartphone seller in India in the last quarter of 2017.
Coinciding with the news, mobile network Three today announced that it will be bringing Xiamoi handsets to the UK for the first time.
Three UK’s chief digital office, Tom Malleschitz, said: “We have been watching Xiaomi’s success from afar and impressed with the huge range of connected devices that they currently offer. This partnership provides us with another leading brand in our smartphone range and also opens the door for innovative new connected products that we can provide to Three customers in the future. So watch this space!”said, “We have been watching Xiaomi’s success from afar and impressed with the huge range of connected devices that they currently offer. This partnership provides us with another leading brand in our smartphone range and also opens the door for innovative new connected products that we can provide to Three customers in the future. So watch this space!”
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