If Xiaomi succeeds today and becomes the first share in the CDR issuance, it will set a number of precedents in the history of A-share IPOs. For example, if the company's shareholding structure includes AB shares with inconsistent voting rights, the VIE framework is not dismantled, and the IPO is CDR + Hong Kong stocks.
Millet lightning on the 12th meeting
On the evening of June 15, the Securities Regulatory Commission issued a report that Xiaomi’s issuance of the China Depositary Receipt (CDR) will be reviewed during the work meeting of the 88th Issue Review Committee in 2018 on June 19.
On June 7th, Xiaomi submitted the CDR issuance application for the first time. This means that from the first submission of the CDR issuance application to the official meeting, Xiaomi only experienced a total of 12 days, which was previously considered by the market to be the industrial prosperity of the lightning conference. It took 35 days from the first submission of the IPO application to the previous meeting.
According to statistics from Wind, in the current queuing of nearly 280 IPO companies, only 4 companies first announced their prospectuses for the first time. This year, as many as 274 companies announced their initial prospectuses between 2012 and 2017. The first announcement prospectus for the three companies was before 2012.
On June 14th, the appraisal committee issued feedback on Xiaomi’s initial application. It listed a total of 84 questions and exceeded 20,000 words. It strictly inquired about Xiaomi’s CDR issue.
From the recent series of rules issued by the China Securities Regulatory Commission and the Shanghai and Shenzhen Stock Exchanges for the issuance of new stocks and CDRs for innovative companies, the tightening of restraints on innovative companies has been strengthened, and the actual controllers and supervisors have been strengthened to supervise and achieve profitability in the company. No reduction before. In addition, the policy has also strengthened information disclosure and risk warnings for innovative companies.
Or will create a number of first in the history of A shares
If the meeting goes smoothly today, Xiaomi will set a number of precedents in the history of A-share IPOs. For example, if the company's shareholding structure includes AB shares with inconsistent voting rights, the VIE framework has not been dismantled, and IPO by way of CDR + Hong Kong stocks.
If there is a meeting, how much will Xiaomi CDR's financing scale be?
On June 14, the Securities Regulatory Commission disclosed an updated version of Xiaomi's CDR prospectus. Xiaomi’s CDR’s issuance size corresponds to a ratio of not less than 7% of the basic shares of the CDR and Hong Kong stocks after the issuance of the CDR. The corresponding underlying shares account for no less than 50% of the total size of CDRs and Hong Kong stocks.
Based on the 7% and 50% ratios, a number of sellers' agencies currently analyze that Xiaomi’s CDR will be worth 30 billion yuan. In the history of A-shares, this initial financing scale will enter the top 10, and is expected to surpass Guotai Junan, becoming the largest IPO fund-raising since 2011.
"Daily Economic News" reporter noted that at present, some brokerage agencies are ready for the listing of Xiaomi. Guotai Junan, GF Securities, and Tianfeng Securities, which are focused on by new wealth analysts, have all released special research reports concerning the unique “millet model” and the millet industry chain.
A chief analyst of a brokerage appliance company told the Daily Economic News reporter that, like BATJ's previous subversion of the industry, Xiaomi will play the same role in certain industries in the future. There are still many whiteboard markets that it can occupy.