附近上门

Morning Report: Xiaomi will delay its CDR offering at the Shanghai Stock Exchange, while its Hong Kong IPO still runs on schedule.

China鈥檚 smartphone maker Xiaomi has announced that it will postpone listing its China depositary receipts in mainland China until completing a separate IPO in Hong Kong. This decision came in right before its scheduled hearing with the China Security Regulatory Commission (CSRC) on its for CDR, potentially (link in Chinese) its opportunity to be the first domestic company that releases a CDR offering. CSRC soon (link in Chinese) that it 鈥渞espects Xiaomi鈥檚 decision,鈥� and cancelled the hearing.

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The company is reportedly targeting a valuation of and is planning to raise around $10 billion from its public offering, but Xiaomi is not only in the spotlight for its large IPO volume. More importantly for Beijing, the company鈥檚 CDR offering, the first ever in China, is expected to for Chinese tech giants participating in the domestic exchange market.

Xiaomi itself did not specify any reasons for this delay. However, told the Chinese media outlet IFeng Tech that Xiaomi was possibly concerned about the flaccid performance of the domestic capital market. According to , the postponement may also be due to the worry that the CDR rules will not be finalized by the end of June.

It is worth noting that last Thursday the CSRC disclosed its first to Xiaomi鈥檚 CDR application. The commission inquired about the Xiaomi鈥檚 internet business qualification, its competition within the industry, and its corporate governance issues, among other matters. Some have that the commission鈥檚 inquiry led to concerns over Xiaomi鈥檚 valuation and thereby its delay.

Xiaomi announced that it will 鈥渃hoose an appropriate opportunity鈥� to move forward with a CDR offering in the future. However, it is unclear when the company will revisit this option.

After all, it is understandable that Xiaomi is hesitant to become the trailblazer of CDR, or the first person to eat a crab, as the Chinese would put it. However, Xiaomi鈥檚 move may add doubts to the future of CDR offerings of China鈥檚 such Baidu, JD, and Alibaba.

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