When Xiaomi Corp.’s founders were eating millet congee at an office in Beijing’s Zhongguancun neighborhood in 2010, they decided to create a smartphone brand selling handsets at “honest” prices.
Eight years later, Lei Jun and the seven other Xiaomi co-founders have created a company that wants to challenge the global industry dominance of Apple Inc. and Samsung Electronics Co. It’s also targeting an initial public offering that’s expected to be the largest since 2014, and which could create five new billionaires.
Xiaomi last week filed for a debut in Hong Kong that will value the company at USD50 billion to $100 billion, according to six analysts surveyed by Bloomberg. Lei, the chairman and chief executive officer, is the biggest shareholder with a 31.4 percent stake, while his fellow founders control 27 percent of the company, according to the prospectus.
While Lei and Lin Bin, Xiaomi’s president, are already billionaires, a USD50 billion valuation would create three new billionaires. A market value of $100 billion would see five of Lei and Lin’s co-founders reach that mark, an example of how rapidly the world’s second-biggest economy is forging the mega-wealthy. Among the world’s 500 richest people, there are 40 Chinese – the second most after the U.S. – with a combined wealth of $464 billion, according to the Bloomberg Billionaires Index.
Just how big these fortunes will be may hinge in part on how many new shares are issued, with estimates of the public float ranging from 15 percent to 25 percent.
However, the market’s continuing appetite for tech companies is in doubt. Online health-tech service provider Ping An Healthcare and Technology Co. dropped below the offer price on its first day of trading in Hong Kong last week. Bloomberg
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