While we wait for the mega-listing of smartphone maker Xiaomi, Nasdaq will be offering a taster from the company’s little brother.
Huami, which develops smart wearable devices for the Chinese group, filed notice on Friday with the US Securities and Exchange Commission on an initial public offering that it hopes will raise US$150 million.
Nasdaq said that Credit Suisse, Citi and China Renaissance were the joint bookrunners on the deal, but no pricing terms were disclosed.
Founded in 2013, Huami booked US$295 million in sales for the 12 months ended September 30, and reported a profit of 95.37 million yuan (US$14.8 million), a 37% increase on the same period in 2016.
Huami shipped 11.6 million devices and had a total of 49.7 million registered users in the first nine months, according to the prospectus. It had planned to shift another 6.5 million pieces in the fourth quarter.
By comparison, fierce competitor Fitbit recorded a loss of US$231.7 million on a turnover of US$1.04 billion in the first three quarters.
Huami’s listing will be a litmus test for Xiaomi’s own IPO, which is expected to happen before the end of the year, and probably in Hong Kong rather than the US.
Xiaomi owns 19.3% of Huami, while Xiaomi-controlled venture capital firm Shun Wei has a 20.4% stake. The two Xiaomi companies, controlled by founder Lei Jun, now have bigger stakes than Huami founder and chief executive Huang Wang, who has 39.4%.
There are many parallels between the meteoric rises of Xiaomi, Huami, with both relying on low-cost strategies. As the sole partner of Xiaomi for the design and manufacture of wearable products such as smart bands and watches, Huami has been able to feed off its branding.
Xiaomi, a manufacturer of mobile phones, electronics and software, undercuts its competitors by at least 50%, while a Huami wearable is selling in Hong Kong for HK$200 (US$25.6), or about one-fifth or one-sixth of the latest version of Fitbit.
Meanwhile, Xiaomi has enlisted Morgan Stanley and Goldman Sachs for its own IPO, which is likely to beat Alibaba’s US$25 billion record for a Chinese company.
Xiaomi is expected to be valued as high as US$100 billion, more than double its US$45 billion valuation in 2014. In 2017 the company recorded revenues of 100 billion yuan (US$120.41 billion).