Xiaomi plans to raise $5.5 billion for its electric vehicle (EV) division through an upsized share sale, exceeding the target by selling 800 million shares at HK$53.25 each. Strong investor confidence led to oversubscription, with over 200 participants. The funds will enhance EV production, aiming for 350,000 units in 2023 and supporting international shipping by 2027. Xiaomi’s EV revenue reached RMB 32.1 billion ($4.4 billion) with over 135,000 SU7 sedans delivered. The company also secured land in Beijing for factory expansion and allocated a significant portion of its 2025 R&D budget to artificial intelligence, reflecting wider trends in Chinese tech funding.
Xiaomi is set to significantly bolster its electric vehicle division by raising $5.5 billion through an enlarged share sale. The company is making aggressive strides into the EV industry, which it ventured into just last year with the introduction of its SU7 sedan. The Hong Kong-listed tech powerhouse sold 800 million shares at HK$53.25 each, exceeding the planned 750 million shares, indicating robust investor confidence.
This share sale coincides with a remarkable increase in Xiaomi’s stock price, which has surged nearly 150% over the past six months. Although the final share price was towards the lower boundary of the initially forecasted range of HK$52.80 to HK$54.60, the offering was significantly oversubscribed. More than 200 investors took part, with the top 20 acquiring roughly 66% of the offered stock.
The fresh capital will enable Xiaomi to accelerate its business growth, research, and technology innovation. This investment is crucial for the company’s strategy to increase its EV production and achieve its revised delivery goal of 350,000 units this year. For 2024, Xiaomi anticipates generating RMB 32.1 billion ($4.4 billion) in revenue from its EV division, with over 135,000 SU7 sedans delivered.
Looking ahead, Xiaomi plans to commence overseas shipments of its electric vehicles by 2027. To facilitate this expansion, the firm has secured a 52-hectare (128.5-acre) tract of land in southern Beijing for the development of the third phase of its automobile manufacturing facility. Furthermore, Xiaomi President Lu Weibing announced that a quarter of the company’s research and development budget for 2025, estimated at RMB 7 to 8 billion, will be devoted to advancing artificial intelligence initiatives.
This recent capital-raising effort by Xiaomi aligns with a broader trend of Chinese tech companies seeking funding in the Hong Kong market. This shift is partially attributed to a perceived relaxation of government scrutiny following a recent meeting between Chinese President Xi Jinping and executives from the tech sector. Before Xiaomi’s share offering, Chinese enterprises had already raised $16.8 billion in equity during the first quarter, more than double the amount from the same period last year.
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