Published: Thu, May 03, 2018
Finance | By Kristine Clayton

China's Xiaomi files for mega Hong Kong IPO, lifts lid on financials

China's Xiaomi files for mega Hong Kong IPO, lifts lid on financials

Such as listing, which is expected to value the company at up to US$100 billion, would make it the biggest Chinese tech IPO since Alibaba Group's US$25 billion debut on Wall Street in 2014.

The announcement came as the consumer electronics company gave investors the first detailed look at its financial position ahead of the much-hyped IPO.

Xiaomi's 2017 sales jumped by two-thirds to 114.6 billion yuan, with overseas revenue more than tripling to 32.1 billion yuan, its filings show. It also said it made a net loss of 43.89 billion yuan versus a profit of 491.6 million yuan in 2016.

Xiaomi is seeking to go public at a sensitive time for Chinese tech companies. While China's State Council has approved plans to introduce CDRs, timing and details are unclear.

Co-founders Lei Jun and Lin Bin, who are also the executive directors, will own all of the Class A shares, although the percentage of their respective voting rights after the IPO was not disclosed.

Xiaomi, in its deliberate move, is trying to pour huge investments and expand beyond borders. It is also making a big push outside China's borders, with 28 percent of its sales derived from overseas markets a year ago, up from 6.1 per cent in 2015. Xiaomi has portrayed a consolidated image in the emerging markets and now it is looking forward to entering developed markets for smartphones.

"As far we know, apart from Xiaomi there has never been another smartphone company that has successfully rebounded after a decline in sales", Lei Jun said, after describing the company's mission as "to relentlessly build incredible products with honest prices" to everyone in the world.

That offered investors a glimpse into the inner workings of the company controlled by billionaire Lei Jun, and its ups-and-downs since nearly dropping off the radar in 2016. The mounting supply chain problem forced the company to retreat from many overseas markets, including Indonesia and Brazil.

To reach more customers, Xiaomi went physical: it now operates more than 500 brick and mortar retail stores, mostly in China and India. In India and China Xiaomi started expanding its offline presence. It has enjoyed particularly strong growth in India, where it has overtaken Samsung as the biggest selling smartphone maker. Consequently, Xiaomi's quarterly shipment share swell to 7.2% in Q4 2017 from just 3.3% in Q4 2016.

Exchange officials of Shanghai and Shenzhen had been particularly aggressive in wooing Xiaomi and other Chinese technology companies to raise capital onshore, promising fast-tracked approvals, easier regulations and additional incentives.

Alongside smartphones, Xiaomi makes dozens of internet-connected home appliances and gadgets, including scooters, air purifiers and rice cookers, although it derives most of its profits from internet services.

Like this: