By Tang Guhan
China's electronics giant, the Xiaomi Corp. yesterday updated its prospectus on the China Securities Regulatory Commission (CSRC) website.
It said the volume of issuance of the CDRs for this financing round would account for up to 7 percent of the total equity of the company, representing 50 percent of its CDRs and H-shares issuances this time.
However, the prospectus did not suggest the exact financing amount for this CDRs issuance.
The CDRs issuance is likely to amount to USD 5.6 billion (around 35.8 billion yuan), based on the 80 billion dollar market value of the company as estimated by institutional analysts.
As one of Xiaomi's underwriters, Goldman Sachs indicated that the market value of Xiaomi would be set within a range of between USD 70 billion and USD 86 billion.
Analysts from Morgan Stanley reported an estimate of a range between 71 and 92 billion dollars for Xiaomi's market value based to its current strong cash flow.
Scholars across the globe suggested a company's valuation should be based on not only a financial analysis but also its business model and company outlook.
Xiaomi used to depend on its online sales while the company has put up over 331 retail outlets as of March 2018 in China and it has also opened 2,500 outlets in the Indian market.
It launches new products offline and online simultaneously and supplies them to retailers directly.
Xiaomi's operating income amounted to 34.412 billion yuan with a net loss of 7.005 billion yuan in the first quarter in 2018, according to the files submitted to the CSRC.
