China's Xiaomi submits HK filing, with big IPO expected

  • China's Xiaomi submits HK filing, with big IPO expected

China's Xiaomi submits HK filing, with big IPO expected

Xiaomi posted a gross profit margin of just 8.8 per cent for its smartphone business in 2017 compared to 60 per cent for its internet services business.

Xiaomi, one of the world's biggest smartphone makers, has filed to go public in Hong Kong in what's expected to be a massive IPO. "Xiaomi is and will continue to prove that the Xiaomi model is quickly replicable globally", he said.

Xiaomi's business now covers smartphones, mobile application stores and intelligent devices from routers and AI speakers to air purifiers and wristbands.

The company posted a net loss of 43.9 billion yuan, mainly from issuing preferred shares to investors, and 54 billion yuan in fair value gains on investments that had to be accounted for, according to filings.

The company makes the lion's share of its profit - 60 percent - from internet services, including gaming and advertising linked to its homegrown user interface, MIUI, which had 190 million monthly active users as of March 2018. Xiaomi's decision, four years after Alibaba Group Holding Ltd. chose NY, signals a new phase for the city's ambitions to rival the USA market.

The company is now at the fourth position in the smartphone market globally, behind Samsung, Apple and Huawei.

Hong Kong has new rules for IPOs allow companies with different share classes to be listed on the Hong Kong stock exchange.

Excluding one-time charges, it said its profit was 5.36 billion yuan, according to the file, which is the first time the company has reported financial details.

In terms of markets, China is the company's biggest market and India is its most successful worldwide operations.

Xiaomi doubled its shipments in 2017 to become the world's fourth-largest smartphone maker, according to Counterpoint Research, defying a global slowdown in smartphone sales. The numbers underscore how Xiaomi has remained resilient even as the global smartphone market has slowed, helped in part by a push overseas into markets like India.

The company is also facing greater competition in emerging markets like India and Indonesia, where competitors Huawei, Oppo and Vivo are expanding. The exchange modified its regulations to accommodate such companies after losing Alibaba's dual-class listing to NY because rules at the time only allowed a single share class.