China’s smartphone maker Xiaomi delays its CDR offering

Chinese smartphone manufacturer Xiaomi has abruptly postponed its plan to list on Mainland China’s stock exchanges.

On June 19, the company stated via its official account on Weibo that after serious consideration it will issue its China Depositary Receipts (CDR) only after completing its initial public offering in Hong Kong.

The company asked the China Securities Regulatory Commission to delay reviewing its CDR files. The regulatory commission replied saying it will respect Xiaomi’s decision and canceled the already scheduled review.

The application for review was submitted on June 7, with Xiaomi being China’s first company to file a CDR application, and on June 15 the reviewing for the application was scheduled for June 19. The fast-tracking of applications shows the authorities are eager to see the issuance of CDR shares in the mainland’s markets.

To bring back home the country’s tech giants such as Alibaba and Baidu, which are mostly listed offshore, China’s securities regulator launched China Depositary Receipts, allowing domestic investors to invest in these offshore-listed companies. Previously, Xiaomi was reported to reserve up to 30 percent of its new issues for CDR buyers, equating to about $3 billion.

Xiaomi filed its application for the IPO to the Hong Kong Stock Exchange in early May, and sources familiar with the matter said the IPO would be worth at least $10 billion, the world’s biggest since 2014.