Xiaomi raises $5.5bn to accelerate EV expansion

China's Xiaomi Corp said on Tuesday it had raised $5.5bn (R100.26bn) in an upsized share sale as the company pushes forward with its ambitious EV manufacturing plans.

The company sold 800-million shares at HK$53.25 (R124.86) each, the company said in its statement to the Hong Kong Stock Exchange.

Xiaomi, the world's third-largest smartphone maker which moved into electric vehicle manufacturing last year, had planned to sell 750-million shares but increased the size of the deal while the book building process was under way.

The final price was towards the bottom end of the HK$52.80 (R123.82) to HK$54.60 (R128.04) price range flagged to investors when the deal launched on Monday.

The price was a 6.6% discount to Xiaomi's closing price of HK$57 on Monday. Xiaomi said the money raised would be used to fund the acceleration of its business expansion, research and technology development.

Xiaomi began manufacturing EVs last year with the launch of the SU7 sedan after selling smartphones, household appliances and smart gadgets for most of its 15-year history.

Xiaomi reported last week an almost 50% jump in fourth-quarter revenue and raised its target for electric vehicle deliveries this year to 350,000 from 300,000.

It reported 32.1-billion yuan (R80.24bn) in revenue for its EV business in 2024, delivering more than 135,000 SU7 sedans. Xiaomi said the company aimed to start shipping cars overseas in 2027.

The tech firm has purchased a new land plot of 52ha in Beijing's south, where it would build the third phase of its car factory as it ramps up annual shipment target, Chinese media has reported.

Xiaomi will invest 7 to 8-billion yuan (R17.60bn-R20.11bn) out of its 2025 total research and development budget of 30-billion yuan (R75.41bn) into AI, Xiaomi president Lu Weibing said last week.

Xiaomi's deal extends a rush of tech-focused capital raisings from Chinese firms in Hong Kong, as companies take advantage of positive sentiment towards the tech sector.

A summit led by President Xi Jinping with top tech leaders last month was widely seen as a sign that strict government scrutiny of the sector which began in 2020 was easing.

Before Xiaomi's share sale, Chinese firms had carried out $16.8bn (R306.35bn) worth of equity capital market activity in the first quarter, according to LSEG data, more than double the same period last year.