Many doubts have awakened the Xiaomi’s debut on the Hong Kong stock exchange , surely burdened by high expectations finally unfulfilled, and by a media stir that the Chinese manufacturer usually moves well in their favor but in this case has turned against them.
Some media talk about a IPO “Lackluster” and others use slightly stronger qualifiers to describe an Initial Public Offering -IPO, in financial jargon- in which Xiaomi has only managed to raise 4,700 million dollars , thus remaining as the third largest manufacturer of smartphones among the listings.
It was in factof the world of technology in recent times, withof your company and the mantra “Do not be greedy” coloring the day to day of ones. And yet, concerns about the High valuation of the company and the open trade war between China and the United States They have demolished a day that was expected festive at the Xiaomi headquarters.
The data is devastating, and that is that ** Xiaomi’s shares fell almost 6 percent at the start ** of the day, recovering a few hours later to 16.96 Hong Kong dollars, and moving always below the 17 HK $ out .
Lei Jun and his management team had an estimated value of 100,000 million dollars at the beginning of this year, but the company is worth around 53,000 million , a significant drop that the experts explain in a quite convincing way:
Operating below the issue price is due to investors still having doubts about the valuation of shares, which was relatively high compared to similar technology companies such as Tencent or Apple.
Linus Yip, strategist at First Shanghai Securities.
Another key indicator is in fact the valuation in multiple of gains, which left Xiaomi above the mentioned rivals with a valuation of 39.6 times its profits in 2018 while Apple is trading 16 times its profits , with the valuation of Tencent multiplying by 36 his benefits at the moment.
The doubts with the initial assessments and, without doubt, the fledgling war that is being cooked between the United States and China and thatand tariffs in some markets, have not helped a Hong Kong stock exchange that is currently trading at a minimum of the last nine months.
Is Xiaomi the Chinese Apple? Well no, at least not in his current assessment …
Well it’s complicated to really qualify manufacturers like Xiaomi, mainly because the Chinese market is probably the most complicated on the planet in terms of competition, with very high sales volumes and narrow profit margins. In addition, their companies do not usually devote only to technology, because Xiaomi also sells clothing, office supplies and other products in addition to his well-known smartphones and electronic devices.
In fact, not everything is bad in the stock market launch of Xiaomi, as a company with only eight years of travel has managed to raise 4.72 billion dollars in the midst of a tense climate, becoming the highest emission of a technology company in the last four years Worldwide.
Equalize Apple is very far, because the Cupertino firm is close to becoming the first American company -you know that in the United States the trillion equals one trillion euros_, with currently 945,000 million dollars of quotation , which will surely grow in a couple of months closer to the arrival of the new iPhone.
The Xiaomi guys have a way, but their sales are still record high, their international landing is already walking at a good pace, their fans are counted by millions and their future is very promising … Will the Chinese firm become a giant of the caliber of Apple?
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