The Chinese securities regulator has disclosed the Chinese Depository Receipts (CDR) issuance application of smartphone maker Xiaomi Inc this morning, making the first such listing in the domestic stock market one step closer to the finish line.
According to local Chinese media reports, investors are submitting bids to become cornerstone investors in Xiaomi’s dual listing at a valuation of between US$75 billion to US$80 billion. The company’s planned listing in Hong Kong, which is happening concurrently with its CDR issuance on the domestic stock market, has passed a listing hearing on June 7.
Compared to Xiaomi’s IPO prospectus filed in Hong Kong earlier, the newest filing revealed the company’s first quarter numbers. The company was able to ship 28 million smartphones during the first quarter, up 87.8% year-on-year. This was when global smartphone sales dropped 2.9% year-on-year during the same period.
Xiaomi is the first Chinese company that issues CDRs, which are certificates traded on a Chinese stock exchange issued by a bank that represents equities in foreign companies. Only those companies in the high-tech industries and others deemed strategically important by the Chinese government can issue such securities. Companies also must have a market capitalization of no less than RMB200 billion (US$31 billion), or an operating income of no less than RMB3 billion (US$468 million) in the most recent year, and a valuation of no less than RMB20 billion (US$3.1 billion).
According to Xiaomi’s CDR application disclosed by the China Securities Regulatory Commission this morning, Xiaomi recorded revenues of RMB34.4 billion (US$5.4 billion) during the first quarter of 2018. For the three years between 2015 to 2017, Xiaomi’s revenues were RMB66.8 billion, RMB68.4 billion and RMB114.6 billion.
Xiaomi recorded net profit attributable to ordinary shareholders of the parent company after deducting non-recurring gains and losses of RMB1 billion during the first quarter 2018. For the three years between 2015 to 2017, it recorded RMB2.2 billion, RMB2.3 billion and RMB3.9 billion.
Xiaomi is also making more money in markets outside of China. The company’s overseas sales took a share of 6%, 13.4% and 28% of total sales between 2015 to 2017. During the first quarter of 2018, the company’s overseas sales contributed 36.2% of total sales.