Xiaomi files for $10 billion mega Hong Kong stock market listing

China’s Xiaomi files for $10 billion mega IPO in Hong Kong stock exhange. This is one of the first in Hong Kong under new rules to attract tech firm listings. The listing is expected to raise about $10 billion via the public offering, giving Beijing-based Xiaomi a market value of between $80 billion and $100 billion. This is a major win for the bourse as competition heats up between Hong Kong, New York and the Chinese mainland.

Those targets, if achieved, will make it the biggest Chinese tech IPO since Chinese internet giant Alibaba Group Holding Ltd in 2014. Xiaomi’s prospectus gave investors the first detailed look at its financial health ahead of the much-hyped IPO, which could be launched as soon as end-June, according to the people close to the process who requested anonymity as the details were not yet public.

Besides smartphones, Xiaomi makes other internet-connected home appliances and gadgets, including air purifiers and rice cookers. Currently most of its profits come from internet services, and it has set up apps offering music and other entertainment, in a similar business model to that of Chinese rival Tencent.

“We have changed how hundreds of millions of people live, and we will become a part of the lives of billions of people globally in the future,” co-founder Lei Jun wrote in the prospectus for the flotation.

Xiaomi doubled its shipments in 2017 to become the world’s fourth-largest smartphone maker, according to Counterpoint Research, defying a global slowdown in smartphone sales. It is also making a big push outside China’s borders, with 28 percent of its sales derived from overseas markets last year, up from 6.1 percent in 2015. Yet margins on its smartphones are razor-thin. Xiaomi posted a gross profit margin of just 8.8 percent for its smartphone business in 2017 compared to 60 percent for its internet services business.