Chinese smartphone maker Xiaomi Corp priced its Hong Kong initial public offering (IPO) at the bottom of an indicative range, said people close to the transaction.
Chinese smartphone maker Xiaomi Corp priced its Hong Kong initial public offering (IPO) at the bottom of an indicative range, said people close to the transaction. Xiaomi priced its share offering at HK$17 per share ($2.17), the bottom of a price range of HK$17 to HK$22, the people said. The company planned to sell 2.18 billion shares. Xiaomi’s pricing comes at a delicate time for Hong Kong’s stock market, with the benchmark Hang Seng index falling 6.5 percent this month and 4.8 percent this year amid escalating trade tension between the U.S. and Chinese governments.
Xiaomi did not immediately respond to a request for comment on the IPO pricing. The people declined to be identified as the information was not public. The Beijing-based, Cayman-domiciled company, which also makes internet-connected devices, is due to start trading on July 9. Xiaomi lined up $548 million from seven cornerstone investors including U.S. chipmaker Qualcomm Inc and telecom service provider China Mobile Ltd.
The IPO adds to the $6 billion of new listings so far in 2018 in Hong Kong and is set to be the first under the city’s new exchange rules permitting dual-class shares common in the tech industry in an attempt to attract tech floats. Set up in 2010, Xiaomi doubled its smartphone shipments in 2017 to become the world’s fourth-largest maker, according to Counterpoint Research, defying a global slowdown in smartphone sales. It also makes dozens of internet-connected home appliances and gadgets, including scooters, air purifiers and rice cookers.
Xiaomi had been expected to raise up to $10 billion, split between Hong Kong and mainland China, but last week shelved the mainland offering until after it listed in Hong Kong. The decision was mainly because of a dispute between Xiaomi and Chinese regulators over the valuation of the company’s China depositary receipts (CDRs), people close to the matter told Reuters.
Xiaomi said last week there was no such dispute. But it also said there was no time frame for the CDR issuance, casting doubt on government efforts to lure foreign-listed Chinese tech giants back home.