According to foreign media reports, China encouraged Chinese tech giants such as Alibaba Group to launch domestic CDR (China Depositary Receipts) pilot program to obtain positive initial response, which indicates their stocks. The A shares may be landed shortly afterwards. The plan also received the support of Xiao Jun, the co-founder and CEO of Lei Jun.
Xiaomi expressed support for allowing overseas listed companies to issue CDRs in China. It is said that his company is preparing IPOs (IPOs), which may become the largest IPO since Alibaba’s $25 billion IPO in 2014. .
'This is a good idea, a good policy innovation.' Lei Jun said in an interview. For his company's IPO plan and whether it will issue CDR, he declined to comment.
China now has some of the fastest growing and most valuable technology companies in the world, but BAT Baidu, Alibaba and Tencent are not listed on mainland China. The launch of the CDR aims to bring these shares back to the domestic market. Local consumers are more aware of their products and their valuations may be improved. China’s State Department announced its pilot program on Friday, only less than a month after the idea was publicized – enough to prove the enthusiasm of the government.
The CDR pilot will apply to companies listed overseas and have a market capitalization of more than 200 billion yuan (about 32 billion US dollars). It is also a relatively simple listing path for some other companies, including a valuation of more than 20 billion yuan. A private company with a revenue of RMB 3 billion, and a rapidly growing non-listed company with advanced technology and leading edge.
Alibaba also expressed support for the CDR, but is waiting for further clarification of the new plan.
"Since we have listed in the United States, we have already said that if regulations allow, we will consider listing in China," said Alibaba spokesperson Katie Lee.
Analysts at China International Capital Corporation estimate that there may be 35 private companies listed overseas that meet the conditions and they are expected to raise up to RMB 1.5 trillion in financing. Their report pointed out that Xiaomi, an ambassador of Alibaba, drops Drop-outs, startups, and other US startups may also be part of the pilot program.
Several companies, including Tencent listed in Hong Kong and Baidu listed in New York, have stated that they would consider CDR. During the two sessions last month, several companies also expressed support for domestic listings, including NetEase and 58 cities.
Lei Jun said that one of the reasons why Chinese technology companies are listed overseas is that their risk investors are investing in U.S. dollars. To return funds to limited partners, they need to be listed overseas. By allowing listings in both the mainland and overseas, CDR The plan will solve the problem.
'Some innovative start-up companies got investment from the U.S. dollar fund. Previous regulations made it impossible or very difficult for them to list in mainland China. 'Lei Jun pointed out that 'the CDR provides listings of unicorns and super unicorns in China.' Opportunity. '
He declined to comment on whether Xiaomi is ready to issue the CDR.
Early millet investors include Qualcomm Ventures and IDG Capital. It is said that the company will prepare IPO as soon as this year - the destination is likely to be Hong Kong. It has chosen Morgan Stanley, Goldman Sachs Group and other international banks to underwrite the IPO Business, its valuation may be as high as 100 billion US dollars.
Xiaomi currently focuses mainly on developing countries, but the company said that it will also enter the US market in the future.