Xiaomi is set to seriously support its electric vehicle business by raising €4.96 billion from an upsized share offering. The Chinese tech giant is aggressively expanding into the EV space, a business it started merely last year when it released its SU7 sedan. Xiaomi sold 800 million shares at HK$53.25 each, far exceeding the planned 750 million shares, an indication of robust investor sentiment.

 

The sale of shares follows a recent explosion in the stock price of Xiaomi, which has increased close to 150% over the past six months. Although the final share price came at the lower end of the originally proposed HK$52.80 to HK$54.60 range, the sale was strongly oversubscribed. More than 200 investors took part, with the top 20 being awarded around 66% of the offered shares.

Xiaomi will utilize the new funds to drive business growth, research, and technology innovation. The investment is crucial to the company's efforts to scale up its EV manufacturing and achieve its updated delivery target of 350,000 units this year. For 2024, the company posted RMB 32.1 billion (€3.97 billion) in revenue for its EV business, with more than 135,000 SU7 sedans delivered.

 

Xiaomi is preparing to begin shipping its electric vehicles abroad by 2027. In aid of this expansion, the firm has purchased a 52-hectare (128.5-acre) area in southern Beijing to build the third phase of its car factory. Furthermore, Xiaomi President Lu Weibing made an announcement that a quarter of the company's 2025 research and development budget, approximately RMB 7 to 8 billion, will go into developing artificial intelligence.


This newest fundraising by Xiaomi forms part of a broader pattern where Chinese technology companies are drawing financing from the Hong Kong market. This is owing in part to a reported softening of scrutiny by the government after Chinese President Xi Jinping had a summit recently with technology sector leaders. Before Xiaomi's sale of shares, Chinese companies had already raised €15.14 billion worth of equity capital in the first quarter, a more than doubling of last year's comparable period figures.

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