Xiaomi IPO filed for, but not before two co-founders leave company
Zhou Guangping and Wong Jiangji have both left the Chinese tech manufacturer they founded, just four days Xiaomi launched an initial public offering on the Hong Kong stock exchange.
An internal memo from April 28 announced the resignations, acknowledging the two for putting the blueprints together for the company’s hardware and services platforms. Pandaily reports that chairman Lei Jun has assigned CFO Chew Shou Zi to take on senior vice president duties.
Xiaomi had eight founding members at its inception in 2010, including Lei. Zhou came from Motorola, serving mainly in design, research and development and became R&D lead at Xiaomi. Wong oversaw Microsoft’s mobile projects in China before coming to Xiaomi to become strategic vice president. It’s not known where each will head to next.
While there’s some uncertainty as to what kind of statement this imprints onto Xiaomi — such as whether its low-margin approach to smartphones, IoT and other smart hardware will survive — it seems that the company is continuing on its trajectory to go public. It has filed papers today for its initial public offering and has had to disclose financial statements it previously kept private.
Reuters reports Xiaomi racked in revenue of ¥114.6 billion ($18 billion) for 2017, up 67.5 percent year-on-year. The company had more than tripled its operating profit to ¥12.2 billion, but racked a net loss of ¥43.9 billion, a major turn from a profit of ¥492 million.
Three banks are providing capital, two of which are US-based (Morgan Stanley and Goldman Sachs) while only one comes from Hong Kong (CITIC CLSA). It’s expected that Xiaomi may achieve valuation above $100 billion with a sell-out of its tender.