For the first time, Xiaomi passed JD.com in market capitalisation, as it aims to join the league of China’s biggest internet players such as Alibaba Group Holding, Tencent Holdings and Baidu.
Xiaomi jumped by up to 4 per cent to a high of HK$19.8 on Wednesday morning, taking its market cap to HK$443 billion (US$56.4 billion), above Nasdaq-listed JD.com’s US$55.4 billion on Tuesday. By noon, it fell slightly to HK$18.94 from the previous close of HK$19.
The Hong Kong market was in decline on Wednesday. The Hang Seng Index fell 1.4 per cent by noon, after US President Donald Trump ramped up the US-China trade war and released a list of additional goods worth US$200 billion that may face 10 per cent tariffs.
Xiaomi, which has been presenting itself as an “internet firm” rather than a hardware maker, has had a roller-coaster ride since its debut on Monday. It staged a dramatic turnaround on Tuesday to surge 13 per cent to close at HK$19, after falling below its offer price in the previous session.
The surge came after index compilers FTSE Russell and Hang Seng Indexes Company announced separately they will include Xiaomi in their widely tracked indices. From July 16, Xiaomi will join a number of FTSE indices, including FTSE China A50 Index, which is tracked by nearly US$7 billion worth of funds globally.
From July 23, Xiaomi will also be added to the Hang Seng Composite Index (HSCI), which could allow mainland investors to buy the stock via the Stock Connect schemes as soon as this month.
The change in the fortune has benefited some investors, at least.
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Chinese entrepreneur He Xiaopeng, who founded and currently chairs Xiaopeng Motors backed by Alibaba, said he has “made some money” after buying Xiaomi shares on Monday and Tuesday, which are worth US$100 million.
“I’m firmly optimistic about Lei Jun and the prospect of Xiaomi,” He said on his official Weibo account.
“For a good company, it’s the best time [to buy] when others are fearful.
“I’m lucky enough to have bought Alibaba shares in 2013 and 2014, which I’ve been holding ever since. I also started buying Tencent shares since 2014 and it’s too bad I didn’t buy enough [of them]. I have this strong feeling that Xiaomi will have as excellent a future as Alibaba and Tencent.”
The turnaround has surprised Lei, founder and chief executive of Xiaomi, as well.
“It’s like a dream, these two days,” Lei said on his Weibo account after Tuesday’s market close.
“The IPO experience, these two days, has made us more grateful. We thank those who have trusted us and supported us! In the meantime, it has also made us more confident and [we will] stick to our own ways – building amazing products that touch the hearts of our users, maintaining honest pricing and letting everyone in the world enjoy a better life through innovative technology.”