Xiaomi to pre-market Hong Kong leg of dual listing on Monday

Hong Kong

CHINESE smartphone maker Xiaomi is set to start pre-marketing the Hong Kong leg of its simultaneous Hong Kong and Shanghai listing next Monday, according to people close to the deal.

The company cleared the Hong Kong listing hearing on Thursday, say the people, who add that the rest of the listing timetable will depend on the approval process of Chinese depository receipts (CDRs).

It is understood that Xiaomi is working towards a trading debut for the CDRs on July 9 and the Hong Kong shares on July 10, after pricing on or around June 28.

However, if the approval for the CDR issuance comes later than expected, the respective dates would be moved to July 16, July 17 and July 9.

The China Securities Regulatory Commission (CSRC) said on its website that Xiaomi had filed for a domestic listing on Thursday, without giving any further details. The application is under regulatory review.

Xiaomi plans to sell around 30 per cent of its landmark IPO in the form of CDRs, people with knowledge of the matter said earlier.

A dual listing would set a template for future CDR offerings, and could increase Xiaomi's chances of meeting a US$70 billion-plus valuation target that some see as aggressive.

Xiaomi is tentatively looking to sell about 15 per cent of its enlarged share capital in the combined listing, implying a fundraising size of roughly US$10 billion, the people said.

China issued final rules on CDRs on Wednesday, allowing overseas-domiciled Chinese technology firms to file a domestic listing application immediately.

The CSRC also approved the launch of six mutual funds focused on strategic investments in CDRs and IPOs of innovative companies, which could raise a combined 300 billion yuan (S$62.5 billion).

The sale of the six funds will end on June 19. Market participants expect these funds will get ready for investments as soon as the week of June 25.

CLSA, Goldman Sachs and Morgan Stanley are joint sponsors for Xiaomi's Hong Kong float. Citic Securities is leading the CDR issue. REUTERS