Chinese smartphone maker Xiaomi goes public, looks to raise $10 billion

Chinese smartphone maker Xiaomi goes public, looks to raise $10 billion

Chinese smartphone maker Xiaomi goes public, looks to raise $10 billion

Xiaomi became the first major company to use Hong Kong's new rules for going public, filing for what's expected be the world's biggest debut since 2014.

But Bloomberg News, citing people with knowledge of the matter, reported that it was expected to be worth at least $10 billion and could value the business as high as $100 billion. Revenue, though, soared 67.5% to 114.5 billion yuan ($18 billion USD) past year.

But it did lose $6.8 billion (43.9 billion yuan) that year, mainly from issuing preferred shares to investors. Operating profit tripled to 12.2 billion yuan, driven mainly by internet services with 60.2 per cent in gross margins.

In the first quarter of 2018, Xiaomi once again topped the Indian smartphone market, reporting an over 31 per cent market share - a whopping 155 per cent annual shipment growth. By the end of a year ago, Xiaomi had topped Samsung Electronics lead sales charts in India.

The company is taking advantage of changes by Hong Kong that allowed companies with different share classes to list.

While Xiaomi is present in 74 countries and regions, it is yet to crack the USA smartphone market, something that it intends to do this year.

According to a report in South China Morning Post on Thursday, the move "would catapult Xiaomi past Baidu and to become the third-biggest Chinese technology company by value, after Tencent Holdings and Alibaba Group".

"If you think of China's tech companies, only a few have a real strategy to expand into the overseas market, and even less have the capability to scale up" globally, said Richard Liu, chief executive of early Xiaomi-backer Morningside Venture Capital.

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.

According to Xiaomi's application, its shareholding structure will comprise class-A shares and class-B shares.

Chinese technology company Xiaomi's IPO application has shed light on the company's finances, showing a rebound from declining sales two years ago to current global growth.

The exchange is eyeing several tech listings that are expected in the coming two years from Chinese firms with a combined market cap of $500 billion. It has enlisted Goldman Sachs, CSLA and Morgan Stanley for its proposed listing.

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