Analysis Of The Case Of Xiaomi Group Going Public In Hong Kong

With the continuous development of the Internet and electronic technology,China's Internet companies have entered the stage of technological innovation and rapid development in order to better adapt to market demand,promote the upgrading of traditional industries,and develop modern service industries.Since March 2015,Premier Li Keqiang has proposed the concept of "Internet +".Manufacturing companies have seen the dawn of development,rushing to embrace the Internet,and a number of "Internet + manufacturing" companies such as robots and Shenyang machine tools have emerged.The emergence of the "Internet + manufacturing" model has brought huge changes to the traditional manufacturing business model,transaction methods,and management activities,and has affected the development strategy of enterprises.At the same time,China's regulators have also continuously introduced preferential policies to companies with technological innovation and significant development potential.On April 30,2018,the Hong Kong Stock Exchange revised the Listing Rules,adding three chapters to the main board listing rules,one of which is to allow companies with different equity structures to list.This also provided an opportunity for the Xiaomi Group to list in Hong Kong.Moreover,on June 6,2018,China's "Administrative Measures on the Issuance and Transaction of Depositary Receipts(Trial)" was officially announced.The launch of China Depositary Receipts(CDR)is mainly to serve unicorn companies and new economic companies,and has made targeted institutional arrangements and optimizations.Many unicorn companies have long-term non-profit due to the VIE structure,equity structure,and long-term profitability.It is difficult to list on A shares.The use of CDR to return to the A-share market not only solves the above problems,but overseas listed companies do not need to be privatized or withdrawn from the original market,which is conducive to maintaining the development of enterprises.Therefore,under the background of the Chinese government's continuous introduction of preferential policies for innovative enterprises,Xiaomi Group was successfully listed in Hong Kong on July 9,2018.This article first summarizes the research background and meaning,and finds that Xiaomi's successful listing has a very close relationship with the background of the times and the continuous improvement of national policies.Secondly,the second chapter introduces the theoretical basis of the company's overseas listing and themodel of the company's listing in Hong Kong.It sets the stage for the analysis of the Xiaomi Group's adoption of the listing model and the countermeasures.The third chapter mainly describes the development profile,financing and listing process of Xiaomi Group,and analyzes that Xiaomi Group is currently in a rapid development stage,and the demand for funds is increasing,which is also one of the main reasons for Xiaomi Group's listing.Then,Chapter 4 of the article first explored the motivations of the internal listing of Xiaomi Group,and found that Xiaomi chose to go public mainly because of its fierce competition in the industry to alleviate its funding pressure,improve its governance structure,and expand overseas markets.In addition,Xiaomi chose to list in Hong Kong on the one hand because of its policy bonus and low listing conditions and costs,and on the other hand because of Hong Kong's geographical advantage,it created convenient conditions for its return to the A-share market.The fifth chapter of this article first introduces and analyzes the VIE structure built by Xiaomi Group and its reasons.Then using financial indicators and DuPont analysis,the analysis shows that its debt repayment ability and operating ability have improved after listing,but its profitability and development ability are lacking.Therefore,the company needs to conduct business risks and formulate appropriate development strategies.Looking at the market response after Xiaomi's listing,its initial market was overreacted,and the stock price has been in a relatively depressed state since its issuance,indicating that the capital market has not eliminated concerns about the development of Xiaomi Group.Finally,the article summarizes Xiaomi Group's listing in Hong Kong and makes recommendations from Xiaomi Group,unlisted companies and government departments.It is hoped that companies can choose the listing mode and location based on their own conditions and maintain a stable development trend.Government departments need to adjust their policies flexibly.Regulations provide convenient conditions for Chinese enterprises to raise funds.