Xiaomi is going to an IPO in Hong Kong and plans to raise $ 10 billion
By: bogdan-chub | 03.05.2018, 19:15
Xiaomi announced the entrance to the public market. As a platform for public offering of shares, the Chinese company chose the Hong Kong Stock Exchange (HKEX) and wants to attract at least $ 10 billion of investment. If successful, this will be the largest IPO since 2014, when the online giant Alibaba raised $ 21.8 billion.
What about finances?
Together with the application for an IPO, the company published official data on its financial position. So, in 2017, Xiaomi's revenues amounted to 111.62 billion yuan (about $ 18 billion), which is 67.5% higher than in 2016. Operating profit was 12.22 billion yuan ($ 1.93 billion). The net loss of 43.89 billion yuan ($ 6.9 billion) is due to the repurchase and conversion of preferred shares of investors.
Founder and head of Xiaomi Lei Jun (left) and Chinese singer Chris Wu
Sales of smartphones accounted for 70.3% of revenue, another 20.5% - for other products and smart devices. The share of services was 8.6%, but they will be the main source of revenue, and for the hardware business the manufacturer plans to limit the margin at 5%. Xiaomi is an "innovative Internet company," says CEO Lei Jun.
As experts expect, according to IPO results, Xiaomi's market capitalization may amount to $ 100 billion. The company will issue shares of two classes, and Lei Jun will have a controlling stake of 28%.
Xiaomi announces the largest platform of "Internet of things" (IoT), numbering more than 100 million connected devices. The company also reported about 190 million active Android-devices with a shell MIUI. On average, users spend 4.5 hours a day on brand smartphones.
The proceeds from the IPO will be shared by Xiaomi as follows: 30% will go to the development of artificial intelligence and IoT, 30% - to other developments and research, and another 30% will use to expand influence on the world market. The remaining 10% of the company will increase working capital.
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