Xiaomi Plans IPO Filing Next Month

Xiaomi has picked China’s Citic Securities to handle its issuance of Chinese depositary receipts as the company prepares to file for an initial public offering in Hong Kong, according to Bloomberg.

The company may file for a public listing as soon as next month and is targeting a valuation of about $100 billion, said one of the people familiar with the matter, asking not to be identified. The CDR is most likely to come after the IPO in Hong Kong and its size is yet to be decided, said the person.

Xiaomi could be the biggest IPO since Alibaba’s $25 billion debut in 2014. The smartphone maker, which once fetched a valuation of $45 billion, suffered through a challenging 2016 and then bounced back by revamping its sales model and expanding in India, where it rivals Samsung as the biggest vendor. Xiaomi has chosen Morgan Stanley, Goldman Sachs, Credit Suisse Group and Deutsche Bank for its IPO, people familiar with the matter have said.

China’s government has encouraged its technology companies to issue CDRs so that citizens will be able to invest in the country’s fastest-growing companies. Its brightest stars, including Alibaba and search giant Baidu, have chosen to debut in New York because of the more flexible regulations and abundant capital abroad. Final rules for CDRs have yet to be worked out, which may delay Xiaomi from issuing shares in mainland China at the same time as Hong Kong.

With CDRs, companies that already trade on overseas exchanges, including Alibaba and Tencent, would issue securities that could be purchased in mainland China. The country unveiled a pilot program earlier this month, aiming to bring back the most valuable overseas-listed giants. Xiaomi’s co-founder and chief executive officer Lei Jun hailed CDRs as “an excellent idea“ in a recent interview, calling it “a great policy innovation.“