Xiaomi Corporation Announces Proposed Listing on the Main Board of The Stock Exchange of Hong Kong

A total of 2,179,585,000 shares (subject to the Over-allotment Option) (the “Offer Shares”) are being offered under the Global Offering, comprising an international offering of 2,070,605,000 Offer Shares (subject to reallocation and the Over-allotment Option) (the “International Offering”) and a Hong Kong Public Offering of 108,980,000 Offer Shares (subject to reallocation) (the “Hong Kong Public Offering”), representing approximately 95% and 5% of the total number of the Offer Shares, respectively.

The offer price (the “Offer Price”) is currently expected to be between HK$17 and HK$22 per Offer Share.

The Option Grantors and the Company expect to grant to the International Underwriters, exercisable by the Joint Representatives (on behalf of the International Underwriters), the Overallotment Option, which will be exercisable from the date of the International Underwriting Agreement until 30 days after the last day for the lodging of applications under the Hong Kong Public Offering, to sell up to 125,451,000 Class B Shares by the Option Grantors or issue up to 201,486,000 New Class B Shares by the Company, representing approximately 15% of the initial Offer Shares, at the same price per Offer Share under the International Offering, to, among other things, cover over-allocations in the International Offering, if any.

Goldman Sachs, Morgan Stanley and CLSA are joint sponsors, joint global coordinators, joint bookrunners and joint lead managers of the Global Offering.

Intended Use of Proceeds

Assuming an Offer Price of HK$19.50, the mid-point of the Offer Price range, and assuming the Over-allotment option is not exercised, the net proceeds from the Global Offering are estimated to be approximately HK$27,560.9 million after deducting underwriting fees and commissions and estimated expenses relating to the Global Offering.

The Company intends to use the proceeds from this offering for the following purposes:

• Approximately 30% for research and development as well as other efforts to develop the Company’s core in-house products, including smartphones, smart TVs, laptops, AI speakers and smart routers;
• Approximately 30% for investments to expand and strengthen the Company’s ecosystem primarily in the fields of IoT and lifestyle products and mobile internet services, including AI;
• Approximately 30% for global expansion, including but not limited to hiring local teams across business functions and investing in its retail partners; and
• Approximately 10% for working capital and general corporate purposes.

Weighted Voting Rights (“WVR”) Structure

The Company will have a weighted voting rightsstructure, effective immediately upon completion of the Global Offering. Under this structure, the Company’s share capital will comprise Class A Shares and Class B Shares.

Each Class A Share will entitle the holder thereof to exercise 10 votes, and each Class B Share will entitle the holder thereof to exercise one vote. The Company’s WVR structure will enable the Company to benefit from the continuing vision and leadership of the WVR Beneficiaries, who will control the Company with a view to its long-term prospects and strategy.

Lei Jun, executive director, Founder, Chairman and Chief Executive Officer of Xiaomi said, “Today we present ourselves to you as we prepare to enter a new stage in our journey.

“Fundamentally, the Internet is all about transparency, efficiency, and equality. We want to allow everyone to enjoy the benefits of technology. That is the goal that all Xiaomi employees and I are working tirelessly for.”

Overview of Xiaomi

Xiaomi is an internet company with smartphones and smart hardware connected by an IoT platform at its core. Xiaomi delivers its amazing products at honest prices to users through its highly efficient new retail channels, and then provides its users with comprehensive internet services. With these internet services, the Company is able to closely engage and interact with users on its platform, thus increasing user stickiness and monetization opportunities.

Xiaomi was founded in 2010 by a group of accomplished engineers and designers, under the leadership of Lei Jun, who believed that high-quality and well-designed technology products and services should be accessible to the world. The Company is built on a relentless pursuit of innovation and an unwavering focus on quality and efficiency.

Public Offer Timeline

The Hong Kong Public Offering is expected to commence at 9:00 am on 25 June 2018 and is expected to close at 12:00 noon on 28 June 2018. Allotment results and the Offer Price are expected to be announced or made available on 6 July 2018. Dealings in the Shares on the Main Board of the Stock Exchange are expected to commence on 9 July 2018, under the stock code 1810.

White Application Forms and Prospectuses of the Company can be obtained from designated branches of the Receiving Banks, Bank of China (Hong Kong) Limited, Wing Lung Bank Limited, Standard Chartered Bank (Hong Kong) Limited, and Hang Seng Bank Limited, and offices of the Joint Global Coordinators. Applicants can submit applications using the White Application Form or online via the designated website of the White Form eIPO service provider at www.eipo.com.hk. Applicants who would like the Hong Kong Public Offer Shares to be deposited directly into CCASS can also use the Yellow Application Forms or give electronic application instructions to Hong Kong Securities Clearing Company Limited via CCASS.