Xiaomi said to tap Citic for CDR, plans IPO filing next month


BEIJINGXiaomi Corp has picked China’s Citic Securities to handle its issuance of Chinese depositary receipts (CDRs) as the smartphone maker prepares to file for an initial public offering (IPO) in Hong Kong, people familiar with the matter said.

The Beijing-based company may file for a public listing as soon as next month and is targeting a valuation of about US$100 billion (RM400 billion), said one of the people, asking not to be identified because the matter is private. 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 Group Holding Ltd’s US$25 billion debut in 2014. The smartphone maker, which once fetched a valuation of US$45 billion, suffered through a challenging 2016 and then bounced back by revamping its sales model and expanding in India, where it rivals Samsung Electronics Co as the biggest vendor. Xiaomi has chosen Morgan Stanley, Goldman Sachs Group Inc, Credit Suisse Group AG and Deutsche Bank AG for its IPO, people familiar with the matter have said.

Xiaomi declined to comment on its listing plans. A representative for Citic didn’t respond to a request for comment.

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 Inc, 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 Holdings Ltd, would issue securities that could be purchased in mainland China. The country unveiled a pilot programme earlier this month, aiming to bring back the most valuable overseas-listed giants.

Xiaomi’s co-founder and CEO Lei Jun (picture) hailed CDRs as “an excellent idea” in a recent interview with Bloomberg News, calling it “a great policy innovation”.