Economy

Chinese Smartphone Major Xiaomi Files for Hong Kong IPO

Chinese Smartphone Major Xiaomi Files for Hong Kong IPO

Revealing financial data for the first time, Xiaomi said in its 597-page IPO application that the company's revenue more than doubled year-on-year to 114.6bn yuan (US$18bn) in 2017, up from 68.4bn yuan (US$10.8bn) in 2016 and 66.8bn yuan (US$10.5bn) in 2015.

The documents Xiaomi filed Thursday shed some light on its finances, showing revenue soared almost 70% past year to around 115 billion yuan ($18 billion). So far things are falling right on the bat for Xiaomi, previous year it entered Spain and is also in talks with U.S carriers that'll make it sell devices on Apple's home turf. Moreover, the operating profit of the company for the year 2017 stood at 12.22 billion yuan which grew from 3.79 billion yuan in 2016.

The Chinese smartphone maker is taking advantage of changes in Hong Kong that mean companies with different share classes can now list in the city. The move comes as the Chinese smartphone maker has expanded quickly to become the fourth-largest seller in the world. Operating profit grew from RMB 3.79 billion to RMB 12.22 billion in the same period, whereas net profits fell from RMB 491.6 million to a net loss of RMB 43.89 billion a year ago.

More news: Leaked photos reveal budget iPhone SE 2 complete with headphone jack

Back in 2014, Chinese e-commerce firm Alibaba broke records when it went public on the NYSE, raising $25 billion in what is to date the largest global IPO ever.

Xiaomi said in its IPO application the company would have a weighted voting rights (WVR) structure, or dual-class shares. At its height, it raised $1.1 billion in venture capital and became the world's most valuable startup.

Then it tried to expand too fast overseas and competitors undercut Xiaomi on price, copied its online sales model and locked in retailers in rural areas to capture first-time buyers. The company has a strong presence in China, Europe and other APAC countries, but it aspires to prevail in the U.S market where it struggles. Still, the company warns that its retail store operation requires a substantial investment, which may explain its losses. In India - the most promising market for Xiaomi - the intensified competition from the newbies, likes of Vivo, put the company on toes. These devices include scooters, air purifiers and rice cookers and much more, however, the company drives most of its profits from internet services.


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