China's Xiaomi prices HK IPO at bottom of range, raises $4.72 billion - sources
Reuters
Published Jun 29, 2018 06:56
China's Xiaomi prices HK IPO at bottom of range, raises $4.72 billion - sources
By Fiona Lau and Julie Zhu
HONG KONG (Reuters/IFR) - China's Xiaomi Corp (HK:1810) priced its Hong Kong initial public offering (IPO) at the bottom of an indicative range, raising $4.72 billion (3.60 billion pounds) in the world's biggest tech float in four years, people close to the transaction said on Friday.
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. It is selling about 2.18 billion shares, one of the people said, making the IPO the largest in the technology sector since Alibaba Group Holding Ltd (N:BABA) raised $25 billion in New York in 2014.
Xiaomi declined to comment on the IPO pricing. The people declined to be identified as the information was not public.
The 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.
The share sale is widely seen as a test of market sentiment for what is expected to be a packed second-half of the year in terms of IPOs in Hong Kong including offerings by China Tower, the world's largest mobile mast operator, and Meituan Dianping, a massive online food delivery-to-ticketing services platform.
Several Chinese IPO candidates preparing to float in Hong Kong and New York could be met with cautious investors if tension persists between the world's two biggest economies, potentially dragging on capital raising amounts after a stellar first half.
China Tower has won approval in Hong Kong for an IPO that could raise up to $10 billion. Its listing timing will, however, depend somewhat on how well Xiaomi's deal is received, sources have told Reuters.
Xiaomi's 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.
The firm lined up $548 million from seven cornerstone investors for its share sale including U.S. chipmaker Qualcomm Inc (O:QCOM) and telecom service provider China Mobile Ltd (HK:0941).
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 handset sales. It also makes dozens of internet-connected home appliances and gadgets, including scooters, air purifiers and rice cookers.
Get The App
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 listing 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.
Beijing-based, Cayman-domiciled Xiaomi is due to start trading in Hong Kong on July 9.
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.