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Home / Business / Xiaomi uses an undetermined delay on CDRs to thwart China's plans for technical lists

Xiaomi uses an undetermined delay on CDRs to thwart China's plans for technical lists



HONGKONG (Reuters) – Chinese smartphone maker Xiaomi Corp. ( IPO-XMGP.HK ) said on Saturday that there was no timeframe for a stock quote on the Chinese mainland Chinese tech giants home ,

Xiaomi's Founder, Chairman and CEO Lei Jun attends a press conference in Hong Kong, China, on June 23, 201
8. REUTERS / Bobby Yip

Xiaomi was expected to raise up to $ 10 billion, split between Hong Kong and mainland deals. But in a startling move earlier this week, it delayed its mainland bid until it ended its scheduled July 7 listing in Hong Kong.

It was not said when the process of issuing Depositary Receipts (CDRs) will resume in China or why the offer has been postponed on the mainland.

Reuters reported that the decision was mainly due to a dispute between the company and Chinese regulators over the evaluation of its CDRs, but the company denied this.

"We had many discussions with the (Chinese) regulators and came to the consensus that in order to ensure the quality of our CDR issues, we first go public in Hong Kong," said Shou, Xiaomi's Chief Financial Officer Zi Chew, said a press conference in Hong Kong.

Xiaomi, which also makes Internet-connected devices, has provided $ 548 million from seven cornerstone investors, including US chip maker Qualcomm Inc ( QCOM.O ) for its blockbuster IPO in Hong Kong, Reuters reported on Thursday.

The Hong Kong offer is said to be the first listing under the new stock market rules aimed at attracting tech floats as competition between Hong Kong, New York and Mainland China intensifies.

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It sells about 2.18 billion shares at a price range of HK $ 17 to HK $ 22 ($ 2.17 to $ 2.80), which is a multiple of 22 , 7-29.3 times 2019 Profit forecasts equals its subscription consortium.

The IPO estimates the Beijing-based Cayman-based company at $ 54.3 billion – $ 70.3 billion after a 15 percent "over-allotment" option that can be sold on demand. If the greenshoe is exercised, Xiaomi's free float will amount to 9.99 percent of its extended share capital.

The new valuation range is well below the $ 100 billion previously praised by sources and the recent $ 70 billion valuation target that some analysts and investors consider aggressive.

Xiaomi Chief Executive and Co-Founder Lei Jun said he expects to expand his product range and international market presence. Xiaomi's phones are currently sold in 74 countries.

"I agree that the smartphone market will grow slowly over the next 10 years, but it's still a huge market," Lei said.

The company, founded in 2010, doubled its smartphone shipments in 2017, claiming to become the world's fourth-largest maker, according to Counterpoint Research.

In addition to smartphones, Xiaomi makes dozens of home appliances and gadgets with Internet access, including scooters, air purifiers, and rice cookers.

Reporting by Julie Zhu and Sijia Jiang in Hong Kong; Additional reporting by Fiona Lau from IFR; Arrangement by Anne Marie Roantree and Stephen Coates


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