China's Xiaomi Raises $5.5 Billion In Share Sale As EV Plans Ramped Up

China's Xiaomi Corp (1810.HK) announced on Tuesday that it has secured $5.5 billion in an increased share sale as the firm advances its ambitious plans for electric vehicle production. The firm announced in its statement to the Hong Kong Stock Exchange that it sold 800 million shares at HK$53.25 per share. Xiaomi, the third-largest smartphone manufacturer globally that ventured into electric vehicle production last year, initially intended to offer 750 million shares but opted to enlarge the deal during the ongoing book-building process. The ultimate price was on the lower side of the HK$52.80 to HK$54.60 price range indicated to investors when the agreement was introduced on Monday, per Reuters.

The price reflected a 6.6% reduction from Xiaomi's closing price of HK$57 on Monday. Xiaomi stated that the funds acquired would be allocated to expedite its business growth, as well as research and technology advancement. Xiaomi started producing electric vehicles last year with the introduction of the SU7 sedan, after primarily selling smartphones, home appliances, and smart devices for the majority of its 15-year existence.

Xiaomi secures $5.5B for EVs

Last week Xiaomi announced a nearly 50 per cent increase in revenue for the fourth quarter and boosted its electric vehicle delivery goal for this year to 350,000, up from 300,000. It announced revenue of 32.1 billion yuan ($4.4 billion) for its electric vehicle business in 2024, having delivered over 135,000 SU7 sedans. Xiaomi announced that it plans to begin exporting cars internationally in 2027.

Chinese media reports reveal that the technology company has acquired a new land parcel of 52 hectares (128.5 acres) in southern Beijing, where it plans to construct the third phase of its automobile manufacturing facility to increase its annual shipment goals. Last week, Xiaomi President Lu Weibing stated that the company will allocate approximately 7-8 billion yuan, a quarter of its total 2025 research and development budget of 30 billion yuan, towards AI.

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Xiaomi's agreement adds to a surge of technology-centred funding efforts by Chinese companies in Hong Kong as businesses capitalise on favourable attitudes towards the tech industry. A conference hosted by President Xi Jinping with leading tech executives last month was largely viewed as an indication that the stringent government oversight of the industry that started in 2020 was relaxing.

Before Xiaomi's initial public offering, Chinese companies executed $16.8 billion in equity capital market transactions during the first quarter, based on LSEG data, which is more than twice the amount from the same timeframe last year.

($1 = 7.7742 Hong Kong dollars)

($1 = 7.2531 Chinese yuan renminbi)