Xiaomi scraps China IPO amid falling profit

Xiaomi scraps China IPO amid falling profit

Chinese smartphone manufacturer Xiaomi has confirmed that it no longer plans to hold an IPO in mainland China.

In a filing to the Hong Kong exchange, Xiaomi said: “Given that the Company is currently focusing on the business development and holds adequate capital, it has decided to terminate the proposed CDR offering.”

In June last year, Xiaomi applied for a public offering of China depositary receipts (CDRs) on the mainland. However, that same month the vendor opted to shelve this plan until after its shares were being traded in Hong Kong.

At the time, Reuters noted that Chinese authorities had clashed with the vendor over the price of the CDRs. Reportedly, Xiaomi hit back against attempts to keep the prices down in a bid to foster a secondary market.

CDRs were spearheaded in early 2018 by the Chinese government to allow Chinese firms to sell shares domestically despite being listed overseas – with the goal of enticing such companies, including tech giants such as Alibaba and Baidu, back to China.

Xiaomi reported slowed revenue growth and falling profits for its Q2, with handset sales stalling.

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