Exclusive: Xiaomi pegs Hong Kong IPO share price at HKD17, valuation shrinking to US$53.9b

Xiaomi to raise up to $53.9 billion on July 9.

Chinese versatile smartphone maker Xiaomi has set its Hong Kong IPO share price at HKD17 per stock, according to people familiar with the matter. Corresponding to the price, Xiaomi’s latest IPO size now halved to US$53.9 billion.

The pricing is in line with our previous reports here and here indicated that the offer price would be at the low end of the HK$17 to HK$22 range.

On top of the disparity between what Xiaomi really does and what Xiaomi claims it does, the company’s core principal might not sit well with some of Hong Kong retail investors – especially in the short-term.

The affordable hardware of reasonable quality that only results in razor-thin profits doesn’t translate into investors’ confidence, especially with the company’s current loss-making situation amidst massive expansion plans.

Yet, LEI Jun, the founder of Xiaomi – a veteran in the tech and startup sector – is someone that heavyweight investors will still bet on.

In addition to securing 7 cornerstone investors that jointly contribute $549.5 million with the likes of China Mobile and Qualcomm, Xiaomi also received investments from a fund under legendary hedge fund manager George Soros.

China’s prominent startup founders – Jack Ma and Pony Ma, both also placed investments worth tens to hundreds of million U.S dollars into Xiaomi in their personal capacity.

In terms of public offerings on the 28th of June, the company received a retail subscription rate of 8.5 times.

Regardless of the uncanny doubts and strong convictions among investors, Xiaomi is seemingly forced into a similar situation – like two years ago back in 2016.

Can the company once again prove its doubters wrong on the 9th of July?

Editor: Ben Jiang