Bloomberg reported that Huami, Xiaomi‘s subsidiary, has started its roadshow for an initial public offering in the US. Huami plans to be listed on the Nasdaq global market on February 8.
Huami was founded in January 2014 and is a Xiaomi eco-chain enterprise. Huami’s website shows its sales exceeded 1.5 billion yuan in 2016. As of September 30, 2017, the total shipments of Xiaomi bracelets exceeded 40 million. The main products of Huami are Xiaomi-branded smart bracelets and smart scales, as well as AMAZFIT-branded smart bracelets and smart watches. As of September 30, 2017, the Xiaomi Sports App and Sports Health Cloud Platform developed by Huami provided Internet services to 49.6 million users.
On Friday, Huami filed an F-1/A with the Securities and Exchange Commission (SEC). The document shows Huami will issue 10 million American depositary receipts (ADR) in its IPO, which is tentatively priced between $10 and $12. In addition to the overallotment that underwriters can execute, the largest IPO will be $138 million.
Huami will use a dual ownership structure, as is written in its filing. The issuance of an American depositary receipt in an initial public offering is equivalent to four A-class common shares. Each share of A shares has one right to vote. In addition, Huami also owns class B common stock, which will have 10 voting rights. When the initial public offering is completed, the total equity held by existing shareholders will be converted into B shares, with a total of 197,736,467 shares. Assuming the underwriters do not carry out the overallotment, the shares will account for 83.2 percent of the total shares and 98.0 percent of the voting rights.
Huami wrote in the filing that according to an agreement signed between Huami and its shareholders earlier, Huami will issue 12,064,825 shares of class B common stock to preferred shareholders before the initial public offering. The company will be listed on the Nasdaq global market under the securities code “HMI”. Investment bank Credit Suisse, Citigroup and China Renaissance will be co-underwriters of Huami’s IPO.
The document also showed that People Better Limited held 35,861,112 shares of Huami, accounting for 19.3 percent of Huami shares. This proportion will fall to 15.1 percent after the IPO, when the voting right proportion will be 17.8 percent. People Better Limited is a wholly owned subsidiary of Fast Pace Limited, and the latter is a wholly owned subsidiary of Xiaomi that is registered in the British Virgin Islands.
In the middle of this month, it was reported that Xiaomi hired CITIC CLSA, Morgan Stanley and Goldman Sachs, as sponsors of its IPO. Xiaomi will go public in Hong Kong early this year. International Financial Review said that if Xiaomi goes public in Hong Kong, the IPO could be as high as $100 billion. It could be the world’s largest tech company that is listed in 2018. And Xiaomi would be the sixth biggest company in Hong Kong Stock Exchange by market capitalization.