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May 3 (NBD) -- Xiaomi Corp, one of China's top smartphone makers, filed for Hong Kong IPO (initial public offering) Thursday, expected to be the world's biggest IPO since 2014. The tech company enlisted CLSA, Morgan Stanley and Goldman Sachs Group Inc as the sponsors.

This is the first IPO application the Hong Kong Exchanges & Clearing (HKEX) has received after it started to accept the listing of companies with WVR structures on April 30 this year.

The prospectus Xiaomi submitted to the HKEX didn't disclose the planned financing amount. However, the filing says the Chinese firm will use the proceeds received from the IPO to develop core products including smartphones, smart televisions, notebook computers as well as smart routers, to expand and enhance the ecological chain based on IoT (Internet of Things), AI and other mobile internet technologies, and to improve global presence.

With regard to Xiaomi's current valuation, the market circulated a range from 60 billion U.S. dollars to 100 billion U.S. dollars. A valuation of no less than 70 billion U.S. dollars for the company was widely accepted by sponsors, investment banks and potential investors, and the figure is likely to exceed 100 billion U.S. dollars within a short term after the IPO, reported Chinese business media outlet Yicai citing sources familiar with the matter.

Xiaomi posted a net loss of about 43.9 billion yuan (6.9 billion U.S. dollars) in 2017, reversing from a meager profit of 492 million yuan (77.2 million U.S. dollars) a year earlier. The company reported a net loss of 7.627 billion yuan (1.2 billion U.S. dollars) in 2015.

Xiaomi said its revenue for 2017 was 114.6 billion yuan (18.0 billion U.S. dollars), compared with 68.4 billion yuan (10.7 billion U.S. dollars) in 2016 and 66.8 billion yuan (10.5 billion U.S. dollars) in 2015.

Smartphones, IoT and personal consumption products accounted for 90.8 percent of Xiaomi's revenue in 2017, while internet services and others contributed the remaining 9.2 percent.

The mega IPO is likely to be a double-edged sword for Hong Kong market as oversubscription might lead to higher Hibor (Hong Kong InterBank Offered Rate) and hence tightened liquidity in the market, reported 21th Century Business Herald citing a Hong Kong-stationed strategist at Bank of America Merrill Lynch.

In September last year, when ZhongAn Online Property and Casualty Insurance Co Ltd, China's first internet-only insurer with a market value of 86 billion Hong Kong dollars (11.0 billion U.S dollars), made its debut on the Hong Kong stock exchange, over 100,000 investors subscribed to buy the stock with deposits surpassing 200 billion Hong Kong dollars (25.5 billion U.S. dollars). As a result, the Hong Kong dollar rose against the U.S. dollar in two weeks.

Email: gaohan@nbd.com.cn