Chinese multinational electronic company Xiaomi’s founder Lei Jun can finally rejoice after the company’s market value swelled past the $100 billion mark, a figure his company fell far short of when it listed two years ago.
The firm’s stock rallied as much as 9.1 percent to a new record in Hong Kong, making it the 13th stock in the city’s benchmark Hang Seng Index to have a market capitalization above $100 billion.
Xiaomi generates the majority of sales from its smartphone business. It had originally eyed a $100 billion valuation for its initial public offering (IPO), people close to the deal said in May 2018. But it was only at half that level upon its debut, and shares traded below the $17 offering price for most of its first two years as a public company.
The stock saw its fortunes reverse in August, after it was revealed that Xiaomi would be added to the Hang Seng Index. Shares have more than doubled since then. During China’s “Double 12” shopping festival, strong sales helped fuel the 20 percent stock jump this month, and a proposal to raise the weighting of businesses like Xiaomi in the Hang Seng Index to 8 percent from 5 percent could lead to more gains.
In November, Xiaomi recorded its fastest quarterly revenue growth in two years, while earnings beat the expectations of analysts. It remains one of the few big Chinese tech companies to experience strong growth abroad while also benefiting from China’s adoption of 5G technology and winning domestic market share from competitor Huawei Technologies.
Huawei has been constantly targeted in the US-China rift and has faced the brunt by being removed from the 5G installation plans of many countries across the world.
Xiaomi released its first smartphone in August 2011 and rapidly gained market share in China to become the country’s largest smartphone company in 2014. At the start of second quarter of 2018, Xiaomi was the world’s fourth-largest smartphone manufacturer, leading in both the largest market, China, and the second-largest market, India.
Xiaomi later developed a wider range of consumer electronics, including a smart home product ecosystem, which has connected more than 100 million smart devices and appliances.