According to recent data, Hong Kong raised $32.8 billion in equity capital in 2017, which is the lowest increase since 2008. But Hong Kong remains one the biggest equity capital-raising centers in the world, and now it is trying to recover. One of the plans is allowing dual-class shares just like New York exchange. Chinese tech companies like Xiaomi are attracted by the dual-class share structures and that is why they usually choose New York for their Initial Public Offerings (IPOs).
So Hong Kong will adopt dual-class shares, and it is expecting a $100 billion IPO for Xiaomi in 2018. According to bankers’ estimations, Xiaomi could be valued at up to $100 billion and this would make it the best valued Chinese tech company IPO. At the second place next year, there would be Lufax which is valued at $18.5 billion dollars: the difference is huge.
Tucker Highfield, the head of equity capital markets syndicate for the Asia Pacific at Credit Suisse, stated that over the next couple of years there is a good chance of $500+ billion market capitalization in the tech sector in China that could go public. Actually, regarding IPOs, Hong Kong ranks fourth globally, behind New York, Shanghai, and Mumbai’s National Stock Exchanges. Xiaomi, a single company, may contribute to change the situation in 2018. A 100 billion dollars IPO will grant Xiaomi the much-needed inflow of funds to expand further into newer markets.