Xiaomi Corp (小米) and some existing investors raised US$4.7 billion after pricing a Hong Kong initial public offering (IPO) at the low end of a marketed range, a person with knowledge of the matter said.
The Beijing-based smartphone maker priced the sale of 2.18 billion shares at HK$17 each, the person said, asking not to be identified, because the details are private.
Xiaomi had offered the shares at HK$17 to HK$22 apiece. The pricing values Xiaomi at about US$54 billion, roughly half the company’s initial goal.
Billionaire George Soros and Chinese investment firm Hillhouse Capital (高瓴資本) were among investors that placed orders for Xiaomi IPO shares, people with knowledge of the matter said earlier.
“Xiaomi’s exceedingly thin margins from hardware significantly drags down its valuation for potential investors,” Counterpoint Research analyst James Yan (閆佔孟) said in Beijing. “I expect it to invest more in the smartphone unit, especially on international expansion. It also needs cash to beef up its ecosystem in markets like India. All those fronts are extremely capital-intensive.”
The IPO is Hong Kong’s biggest first-time share sale since September 2016, when Postal Savings Bank of China Co (中國郵政儲蓄銀行) priced a US$7.6 billion IPO, data compiled by Bloomberg showed.
Xiaomi, led by serial entrepreneur Lei Jun (雷軍), is the first major tech listing in Hong Kong since the territory changed its rules to allow founders to keep outsized voting rights.
A Soros-backed fund placed an early order for a small amount of Xiaomi stock, one of the people with knowledge of the matter said.
Hillhouse placed an order of about US$600 million, while US asset manager Capital Group Cos Inc placed an order for more than US$500 million of stock, the people said.
A price at the low end of Xiaomi’s IPO range translates into 22.7 times its forecast earnings for next year, assuming a so-called over-allotment option is fully exercised, Bloomberg News reported earlier.
The company had already scaled back its ambitions for the offering.
Top executives were initially pushing for an IPO valuation of as much as US$100 billion when listing preparations began last year, Bloomberg News reported at the time.
The company was also planning to raise funds from Chinese investors nearly simultaneously with the Hong Kong IPO.
It has since delayed the plan to float so-called Chinese depositary receipts in Shanghai, which reduced its overall fundraising target.
Goldman Sachs Group Inc, Morgan Stanley and CITIC CLSA Ltd led Xiaomi’s IPO as joint sponsors.
STEPPING UP: The firm has also asked employees to work in split shifts from this week and to halt all but essential overseas business travel from next month Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has implemented a remote work policy for employees not on production lines in an attempt to curb the spread of COVID-19, the world’s largest contract chipmaker said yesterday. This is the first time in the Hsinchu-based company’s history that it has launched a large-scale remote work policy, joining global technology companies, such as Apple Inc and Google, that encourage employees to work from home. The chipmaker has also asked employees to work in split shifts from this week, it said. As the number of virus infections continues to climb worldwide, TSMC has urged employees to halt unnecessary
A two-hour drive south of Amsterdam in Veldhoven, workers decked out head-to-toe in protective gear toil in vast assembly halls. Before entering the inner sanctuary of the facilities, they meticulously layer on masks, gloves and special socks. A single speck of dust or a hair can have devastating effects on production. The result of all this painstaking process is an environment that is 10,000 times more purified than outside. As COVID-19 grips the world, it might just be the safest place to work right now. The teams belong to ASML Holding NV, which holds a de facto monopoly on the industry of
DBS Bank Ltd yesterday hacked its GDP growth forecast for Taiwan this year to 0.9 percent, down from its estimate of 2.3 percent two months earlier, in light of the COVID-19 pandemic and increasing financial market volatility. The bank’s latest forecast was even lower than London-based IHS Markit Ltd’s estimate of 1 percent, while other research institutes’ projections range from 1.6 percent to 2.6 percent. Taiwan’s economic momentum is being negatively affected by the pandemic, DBS said. The rapid spread of the disease from Asia to Europe and the US has dampened the bank’s previous expectation of a “V-shaped” global rebound in the
DOWNSIDE RISKS: Firms have a ‘very low’ chance of boosting investment returns in the next two years, making it hard for them to improve their capitalization, an analyst said Taiwanese life insurers wanting to improve their capital structure face strong headwinds this year, given prolonged low interest rates and economic impacts derived from trade protectionism and the COVID-19 pandemic, Taiwan Ratings Corp (中華信評) said on Friday. The local life insurance sector also still has high asset risks and such risks are susceptible to market volatility, the local arm of Standard & Poor’s Global Ratings said. Since last year, major financial holding companies — including CTBC Financial Holding Co (中信金控), Cathay Financial Holding Co (國泰金控) and Shin Kong Financial Holding Co (新光金控) — have announced plans to raise fresh capital to