May 31, 2018 (China Knowledge) - Chinese smartphone company, Xiaomi Corp. is set to be the biggest tech listing since Alibaba's USD 25 bln listing in 2014. It will also be the first company to take advantage of Hong Kong listing reforms to allow companies with dual class shares structures. The IPO is expected to raise at least USD 10 bln and the business could be valued as high as USD 100 bln, similar to the market capitalization of Goldman Sachs or Nike.
According to the prospectus, Xiaomi's 2017 revenue was RMB 114.6 bln, a surge of 67.5%. Of which, 72% of company's revenue is contributed by the domestic market while the remaining revenue comes from the overseas market. Operating profit was RMB 12.2 bln. After deducting the fair value of convertible redeemable preference shares, there is a net loss of RMB 43.9 bln. The company plans to use 30% of IPO funds for R&D of core products such as smart phones and televisions, 30% for expanding investment and strengthening the consumer goods and mobile Internet industry chain, 30% for global expansion; and 10% for general operations use. The firm is also expected to issue Chinese depositary receipts after it goes public. Xiaomi has picked Citic Securities to handle its CDR issuance.
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