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December 3, 2020

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Xiaomi HK trade halted for delay in disclosure

China’s No. 2 smartphone maker Xiaomi Corp briefly suspended trading of its shares in Hong Kong yesterday after failing to disclose a multibillion-dollar top-up placement in time for the market to open.

The unusual halt came just after business began with a brief statement to the stock exchange and remained in place throughout the morning.

Trading began again in the afternoon once a full disclosure of a share and bond sale was published, though shares were down more than 6 percent.

In that later filing to the stock exchange Xiaomi said it plans to sell 1 billion shares at HK$23.70 (US$3) a piece, raising HK$3.1 billion.

It also proposed the sale of convertible bonds, raising a net HK$855 million.

The stock fell as much as 12 percent yesterday, the biggest intraday loss since its 2018 listing.

Xiaomi closed 7.1 percent lower at HK$24.30. That wiped out about HK$5.8 billion in value from the stock, or almost twice what Xiaomi raised with its top-up placement.

Hong Kong’s stock exchange requires a company to apply for a trading halt if certain inside information has been made public before an official disclosure is done.

“It’s definitely unusual because other companies which had share placements usually filed the official announcements soon after pricing,” Castor Pang, head of research at Core Pacific-Yamaichi International Hong Kong, told Bloomberg News.

Xiaomi’s shares have soared more than 140 percent this year, boosted by the troubles of its main competitor Huawei, which has been battered by United States sanctions as relations with China plunge amid trade tensions.

The share and bond sale will help the company boost its coffers to grab more market share from its rivals.


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