Xiaomi picks Hong Kong for USD 10 bn IPO

The USD 10 billion fund-raising target, if achieved, will make it the biggest IPO since Chinese internet giant Alibaba Group Holding Ltd raised a total of USD 25 billion through a New York listing in 2014.

Chinese smartphone and connected device maker Xiaomi is bringing its blockbuster initial public offering to Hong Kong, where it could raise about USD 10 billion in the largest listing globally in almost four years.

The IPO plans, filed on Thursday, will be one of the first in Hong Kong under new rules designed to attract tech listings, a major win for the bourse as competition heats up between Hong Kong, New York and the Chinese mainland.

The listing is expected to give Beijing-based, Cayman-domiciled Xiaomi a market value of between USD 80 billion and USD 100 billion, just eight years after it came onto the scene in China, people familiar with the plans told Reuters.

The USD 10 billion fund-raising targets, if achieved, will make it the biggest IPO since Chinese internet giant Alibaba Group Holding Ltd raised a total of USD 25 billion through a New York listing in 2014.

The IPO could be launched as early as the end of June, according to the people close to the process who requested anonymity as the details were not yet public.

Two separate people said the company's valuation would likely be lowered to a bit above USD 70 billion. One said Xiaomi was looking to sell about 15 percent of its enlarged capital in the offering.

Xiaomi declined to comment on the valuation.

The prospectus gave investors the first detailed look at Xiaomi's financial health ahead of the IPO, showing resilience in a slowing global smartphone market thanks partly to a push into overseas markets like India.

Revenue was 114.62 billion yuan (USD 18 billion) in 2017, up 67.5 percent against 2016, the company said. Operating profit was 12.22 billion yuan, up from 3.79 billion yuan year-on-year.

Xiaomi made a net loss of 43.89 billion yuan versus a profit of 491.6 million yuan in 2016, though this was impacted by the fair value changes of convertible redeemable preference shares.