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Potential $100 Billion Xiaomi’s IPO . Facts on the Prospectus

Xiaomi Corp, a Chinese consumer electronics maker filed for IPO in Hong Kong yesterday. The listing is expected to raise US$10 billion and valued the company at US$100 billion.

The prospectus disclosed Xiaomi’s main holding company, Xiaomi Group, is incorporated in the Cayman Islands and structured with multiple classes of share with different voting rights. CITIC CLSA, Goldman Sachs, and Morgan Stanley will serve as the lead management team. The prospectus disclosed Xiaomi’s revenue in 2017 was RMB114,625 million, with a year-on-year increase of 67.5%; operating profit in 2017 was RMB12,125 million, with a year-on-year increase of 222.7%, mainly from smartphones. Its revenue from smartphone’s revenue in 2017 was RMB80,563 million.

The following are Xiaomi 2017 revenue breakdown:

  • 70.3% — from smartphone;
  • 20.5% — from IoT and consumer products;
  • 8.6% — from internet service. 

 

The following are the allocation of the IPO funds:

  • 30% — for research and development of smartphones, televisions, laptops, smart audio and other core products;
  • 30% — for expansion investment and strengthen the consumer goods and mobile Internet;
  • 30% — for global expansion;
  • 10% — for general business operation use.

 

The following are the key financial data from Xiaomi IPO prospectus:

  • Total revenue in 2017 was RMB114.6 billion, a 167.5% increase compared to RMB 68.4 billion in 2016;
  • Operating profit in 2017 was RMB12.215 billion, a 222.7% increase year-on-year basis;
  • The adjusted  loss for 2015 was RMB 303.9 million;
  • Adjusted profit for 2016 and 2017 was RMB1,895 million and RMB536million respectively;
  • In 2015, 2016 and 2017, Xiaomi had 93.9%, 86.6% and 72.0% of its income came from Mainland China respectively;
  • Xiaomi Co-founder, Chairman and CEO, Lei Jun holds 31.41% shares. Due to the class of shares Lei Jun holds, he has more than 50% voting rights;
  • Co-founder and President, Lin Bin holds 13.33% shares. Co-founder and Brand Strategy Officer, Li Wanqiang holds 3.24%. 

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