China Tower has been cleared for a $10 billion IPO on the Hong Kong stock exchange, hot on the heels of Chinese smartphone manufacturer Xiaomi.
The value of Xiaomi’s listing has not been confirmed but Bloomberg has reported it as $4.7 billion – towards the lower end of expectations – and the device manufacturer’s IPO will likely be used by China Tower to gauge how large Chinese tech floats are received. The tower firm is expected to ramp up marketing ahead of its offering, but may adjust its timings based on the reaction to Xiaomi’s IPO.
Xiaomi had originally intended to list on both the Hong Kong Exchange and the Shanghai Stock Exchange at the same time, but abandoned the latter listing – reportedly because the China Securities Regulatory Commission (CSRC) was not satisfied with the information Xiaomi provided it with regard to its profitability projections.
Scrapping its Shanghai listing has proven a setback for Xiaomi. The device maker was hoping for a $10 billion valuation, so the suspected $4.7 billion figure falls well short of this. Additionally, recent Chinese listings in Hong Kong have been oversubscribed by multiples of 100 – whereas the retail part of Xiaomi’s offering was oversubscribed by 8.5 times.
The results of Xiaomi’s listing will be discouraging for the device maker, but the higher valuation of China Tower will provide hope for Chinese tech firms looking to list in the future. The tower firm is the world’s largest, with over 1.87 million sites, and was created by combining some of the infrastructure assets of the Big Three Chinese operators – all of which are major shareholders in the tower firm.
