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More China Billionaires as Xiaomi Raises $6.1 Billion for Hong Kong IPO

More China Billionaires as Xiaomi Raises $6.1 Billion for Hong Kong IPO

Xiaomi is expected to raise up to $6.1 Billion for their July’s initial public offering (IPO) in Hong Kong, that will value the 8-year-old company between $53 billion to just under $70 billion.  The IPO will also make at least 3 other co-founders billionaires, alongside founder & CEO Lei Jun and co-founder & President Lin Bin.

” More China Billionaires as Xiaomi Raises $6.1 Billion for Hong Kong IPO “

At $75 billion market value with 20% public float, founder & CEO Lei Jun’s share will be worth $18.8 billion while co-founder & President Lin Bin’s share will be worth $8 billion.  3 other co-founders, Li Wanqiang, Wong Kong Kat and Hong Feng will also be billionaires with $1.9 billion each.

Shareholding value of founders ($50 billion with 25% public float):

  1. Lei Jun, 31.4% at $11.8 billion
  2. Lin Bin, 13.3% at $5 billion
  3. Li Wanqiang, 3.2% at $1.2 billion
  4. Wong Kong Kat, 3.2% at $1.2 billion
  5. Hong Feng, 3.2% at $1.2 billion
  6. Liu De, 1.6% at $0.6 billion
  7. Zhou Guangping, 1.4% at $0.5 billion
  8. Wang Chuan, 1.1% at $0.4 billion

Data Simulation: Bloomberg

Xiaomi is the first listing under new Hong Kong exchange rules.  It will go public in Hong Kong, postponing its initial plan to issue China Depository Receipts (CDRs) in Shanghai concurrently.  In April 2018, Hong Kong stock exchange (HKSE) announced companies with dual-class shareholding structures and biotech firms with no revenue will be able to apply for listing on the Hong Kong stock exchange from 30th April 2018 under new bourse rules.

Xiaomi is founded in 2010 by Lei Jun and 7 other co-founders.  It  is the 4th largest smartphone player by market share, behind Apple, Samsung and Huawei.  In 2017, the smartphone maker sold 91.4 million smartphones, generated revenue of $18.09 billion (CNY 114.6 billion) and incurred a net loss of $6.93 billion (CNY 43.9 billion).

In the IPO filing under the new Hong Kong listing rule, Xiaomi will have weighted voting rights (WVR) structure, or dual-class shares.  The dual-class share will give greater power to founding shareholders, even with minority shareholding.  At the moment, Lei Jun owns 31.4%  shareholding of Xiaomi while Lin Bin holds 13.3%.

Source: SCMP, Bloomberg, CGTN

 

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