dearJulius.com

$hide=home

Xiaomi's Weak Debut Signals Trouble For Upcoming Hong Kong Tech Listings

Xiaomi priced the IPO at the bottom of the range it offered, in a deal worth $4.72 billion - the world's biggest technology float in almost four years.

Xiaomi founder, Chairman and CEO Lei Jun (2nd R) attends the listing of the company at the Hong Kong Exchanges in Hong Kong, China July 9, 2018. Photo: REUTERS/Bobby Yip

Reuters

Xiaomi Corp made a weak debut in Hong Kong on Monday, with the Chinese smartphone maker's shares sliding as much as 6 percent on valuation concerns, in an ominous sign for its technology sector peers lining up listings in the city.

[post_ads]A packed initial public offering (IPO) calendar in the coming months will include a $4 billion deal from online food delivery-to-ticketing services platform Meituan Dianping and an up to $10 billion IPO from China Tower, the world's largest mobile tower operator.

"Given the targeted high valuations of many new-economy IPO hopefuls and the number of IPOs going forward, it will be challenging for the market to digest all of them," said Hong Hao, chief strategist at brokerage BOCOM International.

Xiaomi shares closed at HK$16.80, having touched a low of HK$16 in early trade, compared to the IPO price of HK$17 per share. The main Hong Kong stock market index ended 1.3 percent higher.

Xiaomi priced the IPO at the bottom of the range it offered, in a deal worth $4.72 billion - the world's biggest technology float in almost four years.

The listing came, however, as escalating trade tensions between the United States and China have shaken markets over the past several weeks. The spat pushed Hong Kong's benchmark index to a nine-month low last week.

51 Credit Card, a Chinese online credit management company, raised HK$1bn ($127 million) from a Hong Kong IPO after pricing it at the bottom of an indicative price range, Thomson Reuters publication IFR reported on Monday.

Asked at the listing ceremony on Monday if the low pricing of Xiaomi and some other tech firms will weigh on upcoming IPOs, Hong Kong stock exchange CEO Charles Li said it was not up to the exchange to have a view: "The market is always open. It's open to everybody...If you don’t like the price, you can stay away."

VALUATION

Xiaomi's IPO valued the firm, which also makes internet-connected home appliances and gadgets, at $54 billion, almost half the $100 billion it had initially hoped for and below its more recent target of at least $70 billion.

At Monday's closing price the company had a market value of $53.3 billion.

Xiaomi's IPO had been expected to raise up to $10 billion, split between a Hong Kong and a mainland offering, which was postponed last month in a surprise move.

The HK$17 price valued the company at 39.6 times its forecast 2018 earnings, while iPhone maker Apple is trading at 16 times and Chinese social media and gaming giant Tencent Holdings at 36.

Mo Jia, a Shanghai-based analyst with industry consultancy Canalys, said the weak debut was to be expected.

"The market environment is getting conservative. Most recent floats in Hong Kong dropped below IPO prices. Xiaomi's self-positioning as an internet company also needs some convincing," he added.

While the company makes more than 90 percent of its revenues from selling smartphones and other devices - through which it offers online services - it has pushed to be viewed as an internet-based company. Such firms tend to carry far higher valuations than device makers.
[post_ads_2]
"We are an internet firm," Xiaomi's founder and chief executive Lei Jun told the listing ceremony at the Hong Kong stock exchange.

"From day one, we've set up a dual-class share structure. Without the innovation of Hong Kong's capital markets, we wouldn't get a chance to go public in Hong Kong," he said.

Xiaomi's float was the first under the city's new rules allowing firms to weight voting rights in favor of company founders, as part of efforts to encourage more tech groups to choose Hong Kong over New York, its arch-rival.

Xiaomi sold 2.18 billion shares in its IPO, 1.4 billion of which were new shares. The deal was led by CLSA, Goldman Sachs and Morgan Stanley.

The company is now the biggest smartphone vendor in India and is pushing into European markets including Spain and Russia, though it has lost share in China recently to lower-cost rivals.

COMMENTS





Note: If you think this story need more information or correction, feel free to comment below your opinion and reaction.
Name

Business,648,Careers & Education,19,Investing,37,Markets,34,Money,6,Personal Finance,19,Real Estate,21,Small Business,37,
ltr
item
Business News: Xiaomi's Weak Debut Signals Trouble For Upcoming Hong Kong Tech Listings
Xiaomi's Weak Debut Signals Trouble For Upcoming Hong Kong Tech Listings
Xiaomi priced the IPO at the bottom of the range it offered, in a deal worth $4.72 billion - the world's biggest technology float in almost four years.
https://1.bp.blogspot.com/-IQrE2OU9Vi8/W0Xga38NrWI/AAAAAAAAylo/PD4T8QKOchoRSy5RK7-n46Rixg7kcEFeACEwYBhgL/s1600/5.jpg
https://1.bp.blogspot.com/-IQrE2OU9Vi8/W0Xga38NrWI/AAAAAAAAylo/PD4T8QKOchoRSy5RK7-n46Rixg7kcEFeACEwYBhgL/s72-c/5.jpg
Business News
https://business.dailynewsview.com/2018/07/xiaomis-weak-debut-signals-trouble-for_11.html
https://business.dailynewsview.com/
https://business.dailynewsview.com/
https://business.dailynewsview.com/2018/07/xiaomis-weak-debut-signals-trouble-for_11.html
true
2833357683530480155
UTF-8
Loaded All Posts Not found any posts VIEW ALL Read More Reply Cancel reply Delete By Home PAGES POSTS View All RECOMMENDED FOR YOU LABEL ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS PREMIUM CONTENT IS LOCKED STEP 1: Share. STEP 2: Click the link you shared to unlock Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy