Chinese smartphone maker Xiaomi Corp (小米) yesterday said there is no time frame for a Chinese share offering, casting doubt on Beijing’s efforts to lure foreign-listed Chinese tech giants back home.
Xiaomi had been expected to raise up to US$10 billion, split between a Hong Kong and a Shanghai initial public offering (IPO). However, in a surprise move this week, it postponed its Shanghai share offering until after it completes its scheduled July 7 listing in Hong Kong.
It did not say when it would restart its China Depositary Receipts (CDR) issuance process, or why it was postponing the Shanghai offering.
Sources said the decision was mainly because of a dispute between the company and Chinese regulators over the valuation of its CDRs, but the company denied this.
“We’ve had many rounds of discussions with the regulators and reached a consensus that to ensure the quality of our CDR issuance, it’s better that we go public in Hong Kong first,” Xiaomi chief financial officer Chew Shou Zi (周受資) told a news conference in Hong Kong.
Xiaomi awarded its cofounder and chief executive Lei Jun (雷軍) about US$1.5 billion worth of shares for his contribution to the company, it said in an updated regulatory filing this week, in one of the largest one-off share-based corporate bonuses in years.
The US$1.5 billion stock, which has been awarded to Lei’s holding entity Smart Mobile Holdings Ltd, was recorded by Xiaomi as share-based compensation expenses on April 2, one month before it filed for its blockbuster Hong Kong IPO.
Xiaomi cofounder and president Lin Bin (林斌) defended the board’s decision on the stock compensation at a news conference.
“Many new-economy companies have compensated their chairmen or CEOs with stocks ahead of the IPOs. Xiaomi isn’t the first and won’t be the last to do so,” he said.
Xiaomi’s board unanimously agreed on the stock award to Lei, who “completely knew nothing about it,” Lin added.
Xiaomi has lined up US$548 million from seven cornerstone investors, including US chipmaker Qualcomm Inc, for its Hong Kong IPO, Reuters reported on Thursday.
The company is selling about 2.18 billion shares at a price range of HK$17 to HK$22 each, representing a multiple of 22.7 to 29.3 times next year’s earnings forecast by its underwriting syndicate.
Lei said he expects to expand the company’s product range and international market presence.
Xiaomi’s smartphones are sold in 74 countries worldwide.
“I agree the smartphone market in the next 10 years will grow slowly. But still, it is a giant market,” Lei told reporters.
Xiaomi also makes dozens of Internet-connected home appliances and gadgets, including scooters, fitness bands, air purifiers, robot vacuums, smart shoes and rice cookers.
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