Xiaomi Corp. is poised to inject a substantial $5.5 billion into its ambitious electric vehicle (EV) program through an upsized share sale, sources familiar with the matter have revealed to Bloomberg.
The move underscores the company’s commitment to becoming a major player in the burgeoning EV market and capitalizes on a significant surge in its stock price.
The Beijing-based tech giant has increased the number of shares offered to approximately 800 million, and is expected to price the deal at HK$53.25 per share, below the midpoint of the initially marketed range.
Originally, Xiaomi intended to sell 750 million shares at a price between HK52.80 and HK54.60 each, according to the deal’s terms as seen by Bloomberg.
Hong Kong’s deal revival: Xiaomi follows BYD’s lead
This fundraising effort, coming on the heels of EV giant BYD Co.’s $5.6 billion capital raise, adds to what is becoming a remarkable year for share sales in Hong Kong.
After years of lackluster performance, Hong Kong’s benchmark stock index has emerged as one of the world’s leading performers this year.
The recent upward trend fuels optimism for a broader resurgence in deal activity in the Asian financial hub.
Xiaomi is investing aggressively in its nascent EV business to drive growth.
The company recently increased its 2025 EV delivery target after posting the fastest revenue growth since 2021.
It’s expanding its second factory, which shows they plan to make more vehicles.
Xiaomi shares have more than tripled from their low in August, making them the best performers on the Hang Seng and one of China’s most expensive tech stocks.
The company has won investors over by duplicating its smartphone success in China’s crowded EV market.
Citigroup Inc. analyst Kyna Wong wrote in a note that the fundrasing can be a long-term benefit.
However, in the short-term, it will pressure the shares given the dilution, the analyst noted.
Hong Kong’s equity market rebound
Xiaomi’s placement puts Hong Kong on course to have its biggest quarter for share sales since the last three months of 2021, when almost $16 billion was raised, according to data compiled by Bloomberg.
Prior to Xiaomi, equity deals in Hong Kong including initial public offerings had hit nearly $10 billion this year, more than sevenfold from a year earlier, according to the data.
Xiaomi plans to use the proceeds from the share sale to accelerate its business expansion and invest in research and development to advance technological capabilities, the terms show.
China International Capital Corp., Goldman Sachs Group Inc. and JPMorgan Chase & Co. are working on the share sale, the terms showed.
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