(March 25): Xiaomi Corp raised about US$5.5 billion (RM24.4 billion) in an upsized share sale, as the Chinese tech firm capitalises on a surge in its stock price to help raise funds to expand its electric-vehicle (EV) business.

The offering, which comes weeks after EV giant BYD Co’s US$5.6 billion fundraising, builds on what’s shaping up to be a bumper year for share sales in Hong Kong. After several years of declines, the city’s benchmark stock index is among the world’s best performers this year, fueling optimism for a rebound in deals in the Asian financial hub.

Beijing-based Xiaomi placed 800 million shares at HK$53.25 each (US$6.85 or RM30.40), according to an exchange filing, confirming an earlier report by Bloomberg. The price marked a 6.6% discount to the closing level on Monday.

The company had earlier been looking to sell 750 million shares at HK$52.80 to HK$54.60 apiece, according to terms of the deal seen by Bloomberg.

Xiaomi has been investing aggressively in its nascent EV business to drive growth. It recently increased its 2025 EV delivery target after posting the fastest revenue growth since 2021. As part of its efforts to ramp up production, the company is expanding the size of a planned second factory in the Chinese capital, Bloomberg reported earlier.

The Hang Seng Index has gained 19% this year, helping renew interest in Hong Kong stocks among global investors who had shied away from Chinese deals in the past few years, with expectations running high for more companies to tap the equity markets this year.

Xiaomi’s stock has more than tripled from a low in August, making it the best performer on the Hang Seng. The company has won investors over by duplicating its smartphone success in China’s crowded EV market.

The fundraising can be a long-term positive for the company given the potential for deleveraging, artificial intelligence-related research and development and building out its EV capacity, Citigroup Inc analyst Kyna Wong wrote in a report. In the short-term, though, it will pressure the shares given the dilution, the analyst noted.

Xiaomi’s placement puts Hong Kong on course to have its biggest quarter for share sales since the last three months of 2021, when almost US$16 billion was raised, according to data compiled by Bloomberg. Prior to Xiaomi, equity deals in Hong Kong including initial public offerings had hit nearly US$10 billion this year, more than sevenfold from a year earlier, according to the data.

Xiaomi plans to use the proceeds from its placement to accelerate its business expansion and invest in research and development to advance technological capabilities, the terms show.

China International Capital Corp, Goldman Sachs Group Inc and JPMorgan Chase & Co worked on the share sale, according to the terms.

Uploaded by Jason Ng