Chinese electronics giant Xiaomi filed for an initial public offering (IPO) in Hong Kong on Thursday in what will likely be the biggest IPO of the year.
Xiaomi is expected to raise up to $10bn (£7.5bn) from the listing. This would give the eight-year old company a valuation of $100 billion, making it the third-biggest Chinese technology company by value after Tencent Holdings and Alibaba Group Holding.
“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,” wrote Xiaomi co-founder Lei Jun in the prospectus for the flotation.
In its IPO filing the company showed its financials from the past few years for the first time. In 2017, revenue increased 67% on a year-on-year basis to 114.6 billion yuan ($18 billion).
The company posted a net loss of 43.9 billion yuan ($6.9 billion) in 2017 after a profitable year in 2016. Xiaomi said the loss was related to the issuance of preferred shares to investors. Xiaomi’s adjusted net profit, which excludes preferred stocks and other items, rose to 5.4 billion yuan in 2017 from 1.9 billion yuan in the previous year.
Smartphones account for over 70 percent of the company’s total revenue and most of its sales are in China (72 percent).
The Xiaomi IPO is a huge win for Hong Kong Exchanges & Clearing Ltd.
Hong Kong recently changed its stock market rules to try and attract more tech firms by letting pre-revenue technology companies with multiple classes of stocks sell equity.
According to South China Morning Post, the exchange’s chief executive Charles Li Xiaojia said last week that over a dozen tech firms and biotech start-ups have made active inquiries about listing in Hong Kong.