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FINANCIAL SERVICES | Staff Reporter, Hong Kong
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Xiaomi reportedly lowers valuation after delaying Mainland offering

The likely valuation of the smartphone maker is now between US$55b to US$70b.

Reuters reports that Chinese smartphone maker Xiaomi is said to have lowered its likely valuation to between US$55b and US$70b following its decision to delay its share offering in the Mainland.

Also read: Xiaomi hit by $8.58b loss in Q1 ahead of blockbuster IPO

The new valuation is far below the US$100b touted by sources earlier this year and below the more recent floor price of US$70b that the company had informally used as guidance for investors.

Pre-IPO research from its sponsoring banks valued the group at between US$65b and US$86b, according to Thomson Reuters’ IFR.

Xiaomi earlier announced that it was postponing the offering of Chinese Depository Receipts (CDRs) until after it completes its Hong Kong listing. It did not give any detail why it is postponing the offering nor when it would take up the application process again.

The delay was reportedly due to a dispute between the company and regulators over the valuation of its CDRs, sources told Reuters. The smartphone maker is said to be planning to raise 30% of its shares through these financial instruments. With CDRs, companies that already trade on overseas exchanges, including Alibaba and Tencent Holdings Ltd., could issue securities that could then be purchased in the Mainland.

Here’s more from Reuters:

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