The biggest IPO in 2018 is coming, are are ready to join the party?
30th April 2018 mark a milestone for Hong Kong Stock Exchanges and Clearing (HKEx), where it starts to allow new listing applicants to adopt weighted voting rights structures (“WVR Structures” or “Dual-Class Capital Structure”) allowing companies to issue classes of shares carrying disproportionate rights. At the same time, China smartphone manufacturer—Xiaomi is tipped to submit its IPO application to HKEx after the long 1st May holiday, to become the first company to exploit the new rule. If it goes according to plan, Xiaomi will be listed by end of June or July. Co-founder and CEO, Lei Jun, and his management team will hold a special class 10-to-1 voting rights shares, meaning the management will only need to own 9.1% shares in order to control the company.
The market values Xiao between US$60 billion to US$100 billion, but there are reports in early 2018 valued it as high as US$200 billion, equivalent to half of the size of HKEx tech mammoth Tencent (HKEx: 0700). According to Bloomberg, Xiaomi listing will raise at least US$10 billion. Not only it will be the largest IPO of HKEx, it will also be the largest IPO since 2014 Alibaba (NYSE: BABA) US$25 billion listing and possibly the largest IPO in tech sector for 2018. Goldman Sachs, Morgan Stanley and Citic Securities are the underwriters
Worth mentioning is that on Friday 27th April, Lei Jun announced a major restructuring of his management team, two of the co-founders Zhou Guangping and Huang Jiangji will resign due to personal reason, where CFO Zhou Shouzi will be promoted as senior vice president.
Xiaomi is the fifth largest smartphone manufacturer in the world, it also has a wide range of subsidiaries which span business to consumer products, smart home devices, media streaming, online finance, and subscription-based video and book download.