INSUBCONTINENT EXCLUSIVE:
Chinese smartphone giant Xiaomi has shelved a plan to sell shares in China in conjunction with its imminent Hong Kong IPO
The company will instead go public in Hong Kong firstand consider the potential for a Chinese offering at a later date.
The change in
strategy was confirmed ina messageposted to Xiaomi Weibo account without specific explanation
Reuters reported that the move was down to a dispute over valuation
Xiaomi declined to comment further when asked by TechCrunch.
The news is a blow to China, which is reportedly scouting out promising tech
companies with a viewing to issuing China depositary receipts (CDRs) on Chinese stock exchanges
Recent laws paved the way to allow CDRs, which istipped to create a trillion-dollar wealth-generation opportunity
Certainly, snagging Xiaomi would have given the initiative a flying start, but other companies including Baidu are said to be the subject
ofaggressive courtship so big names will likely gather sooner rather than later.
Xiaomi IPO is set to happen this month and it is poised to
raise as much as $10 billion, potentially, and atavaluation that could reach as high as $100 million
There have, however,been suggestions that the top number won&t be reached
Still, the listing is shaping up to be the world largest since Alibaba record-breaking IPO in New York in 2014.
In filing for CDRs, Xiaomi
gave away a little more financial information ahead of its public market debut
Chiefly, it revealed that it made a big $1.1 billion loss for Q1 but that was mainly down to one-off charges
The companyactually posted a 1.038 billion RMB ($162 million) profit for the quarter when those items are excluded, and that included
impressive revenue growth to give encouragement to investors.
Still, it hard not to feel a little disappointed by the company recent Mi 8
flagship device, which bears more than a passing resemblance to Apple iPhone X
Yes, Xiaomi is known to aggressively ‘borrow& for others in the mobile space — as do many in the industry — but the fact that the
phone was celebrating its eighth anniversary and that it has made independent design strides in recent times raised expectations that the
company didn&t deliver on
Thisis, after all, a company that shooting for a $100 billion valuation.
WTF are CDRs (other than a potential trillion-dollar market)
