The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Opinion

Xiaomi vindicates HK dual class decision – but at a cost

Listing is a great result, but the rule change it required dilutes good governance.

Xiaomi-logo-Lei-Jun-R-780

Lei Jun, co-founder of Xiaomi



May brought welcome news for Hong Kong.

Xiaomi, one of the world’s most successful smartphone manufacturers and China’s closest answer to Apple, will conduct its IPO on the city’s exchange, potentially raising about $10 billion.

For the Hong Kong stock exchange, this is vindication of a rule change specifically designed to capture tech listings like Xiaomi and a direct response to having missed out on the biggest, Alibaba.

The new rules allow for a weighted voting rights structure, also known as dual-class shares. In these deals, founding shareholders have greater power even if they are minority shareholders. The shares held by co-founders Lei Jun and Lin Bin will carry 10 votes each, while everyone else will get one vote per share.

HKEx did a lot of soul-searching before changing the rules and will feel that the Xiaomi news justifies the decision. The news that China Tower will also seek to raise about $10 billion in Hong Kong at roughly the same time has boosted the feel-good factor (despite the fact it’s not greatly convenient for Xiaomi and will make for a hell of a busy summer for Goldman Sachs, which is on both deals).




You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree