05 July 2018
Xiaomi Call Warrants to Start Trading on SGX on 9 July
  • Three new Call Warrants on Xiaomi Corporation issued by Macquarie will start trading on SGX on 9 July. The Call Warrants (Stock Code: MPAW, DVQW and FKUW) will have a strike price of HKD 20, 24 and 30 respectively, and the same expiry date of 4 February 2019.
  • Xiaomi’s US$4.7 billion IPO was priced at the lower end of the HKD 17-22 range and the retail portion of the offering was 8.5 times oversubscribed. Cornerstone investors include Qualcomm, SF Express, China Mobile, CICFH Entertainment and China Merchants Group.
  • According to the Prospectus, Xiaomi is currently the world's fourth-largest smartphone company. They have built the world’s largest Internet of Things (IoT) platform with over 100 million connected devices and 190 million monthly active users.

cid:image007.png@01D2BDD0.57B4CE40

Three New Call Warrants on Xiaomi Corporation

The three new Call Warrants relating to the ordinary Class B shares of Xiaomi Corporation issued by Macquarie Bank will start trading on SGX on 9 July 2018, in tandem with Xiaomi’s IPO on The Stock Exchange of Hong Kong.

 

A summary of the warrant terms is tabled below. Investors should read the issuer documents found under company announcements on SGX website (link) for the full details of the warrants.  

 

Counter Name

Stock Code

Call/

Put

Exercise 

Price 

(HKD)

Term

Sheets

Listing Date

Expiry Date

Conversion 

Ratio

XIAOMI20 MB ECW190204

MPAW

Call

20

Link

9 Jul 2018

4 Feb 2019

10 warrants to 1 share

XIAOMI24 MB ECW190204

DVQW

Call

24

Link

XIAOMI30 MB ECW190204

FKUW

Call

30

Link

Source: SGX

 

Click here to read a write up about the new Xiaomi Call Warrants by Macquarie.

 

Live prices of the three Xiaomi Call Warrants can be found on both SGX website and Macquarie’s warrant website. Live prices of the underlying Xiaomi share can also be found on Macquarie’s warrant website.  

 

cid:image007.png@01D2BDD0.57B4CE40

Xiaomi’s IPO

According to the Prospectus, Xiaomi is currently the world's fourth-largest smartphone company. They have built the world’s largest Internet of Things (IoT) platform with over 100 million connected devices and 190 million monthly active users.

 

The company generates revenue from four business segments: smartphones, IoT and lifestyle products, internet services and others. For the three months ended 31 March 2018, the smartphones segment contributed 67.5% of total revenue.  Some excerpts below extracted from the post hearing information pack (prospectus):

 

 

 
 

 

Business Strategies (Pg 216)

  • Unwavering focus on innovation, quality, design and user experience
  • Maintain relentless efficiency
  • Expand killer product offerings
  • Enrich internet services
  • Invest in and expand ecosystem
  • Broaden international expansion

 

Competitive Strengths (Pg 211)

  • Our founders
  • Passionate users
  • Triathlon business model
  • Innovation and design
  • Efficiency
  • Ecosystem
  • Cloud, data and AI capabilities
  • Global

 

Risks relating to (Refer to the full list on Pg 48-95)

  • Ability to compete effectively in the global markets for our products and services, which are highly competitive and subject to rapid technological changes
  • Ability to effectively manage our growth or execute our strategies
  • The fact that we have incurred losses and had a net liability position in the past and may continue to incur losses and may not be able to declare or pay dividends in the future

Financials (Pg 300-362)

  • Total Revenue grew by 67.5% YoY for year ended 31 Dec 2017 and grew by 85.7% YoY for the three months ended 31 Mar 2018.
  • The company reported a net loss of RMB 43.9 billion for year ended 31 Dec 2017 and a net loss of RMB 7.0 billion for the three months ended 31 Mar 2018
  • As of 31 Mar 2018, the company had net liabilities of RMB 128 billion and accumulated losses of 136 billion.

 

 

IPO Details

Xiaomi’s US$4.7 billion IPO was priced at the lower end of the HKD 17-22 range and the retail portion of the offering was 8.5 times oversubscribed. Cornerstone investors include Qualcomm, SF Express, China Mobile, CICFH Entertainment and China Merchants Group

 

IPO date

9 July 2018

Shares offered

2.18bn

Issue Price

HK$17

Amount raised

USD 4.7B

Listing on 

HKEx

Estimated market capitalisation

USD 54B

Ticker

1810.HK

PE

22.7x its forecast 2019 earnings

 

cid:image007.png@01D2BDD0.57B4CE40

Points to Note for Warrants on a Foreign Underlying 

Trading in the Warrants may be suspended

If trading in the Underlying Shares on the Relevant Stock Exchange is suspended, trading in the Warrants will also be suspended for a similar period.

 

You may be exposed to an exchange rate risk

There may be an exchange rate risk where the Cash Settlement Amount is converted from a foreign currency into Singapore Dollars.

 

HKEX trading days and hours and different from that of SGX-ST

The price of the Underlying Share is published during the trading hours of the Relevant Stock Exchange. The trading days and hours of the Relevant Stock Exchange are different from that of the SGX-ST. In assessing the price of the Warrants, you should be aware of the differences in the time zone and the actual trading days and hours of the relevant exchanges in Singapore and Hong Kong.

 

*Investors should refer to the Termsheets published by the issuer under “Company Information” on the SGX website for the specific risk factors pertaining to the Xiaomi warrants

 

cid:image007.png@01D2BDD0.57B4CE40

Specified Investment Products

Structured warrants and Daily Leverage Certificates are examples of Specified Investment Products (SIPs). The MAS has introduced measures for intermediaries to safeguard the interests of individual investors investing in SIPs, which are products with features that might be more complex in nature. Investors now have the opportunity to assess their qualifications to trade SIP or enhance their product knowledge through the SGX online portal available here. Speak to your broker to find out how you can qualify to trade SIPs.

 

Description: Description: Description: cid:image002.png@01D30224.8981A6D0

 

Education and Resources

 

Benefits of ETFs

Trading Warrants 

Trading DLCs 

Description: Description: Description: cid:image005.png@01D307B0.3795A970

§  More educational videos  (link)

§  Full list of SGX listed ETFs (link)

Description: Description: Description: Description: Description: cid:image007.png@01D0FB70.0766C930

§  More educational videos (link)

§  SGX Structured Warrant investor guide (link)

Description: Description: Description: cid:image008.png@01D30224.8981A6D0

§  SGX DLC investor guide (link)

§  SGX DLC factsheet (link)

§  SGX DLC Infographic (link)

 

 


My Gateway

cid:image007.png@01D2BDD0.57B4CE40

 

My Gateway

 

SGX’s investor education portal with market, product and investment information and events. Sign up now at sgx.com/mygateway to receive our investment updates and economic calendar.

www.sgx.com

This document is not intended for distribution to, or for use by or to be acted on by any person or entity located in any jurisdiction where such distribution, use or action would be contrary to applicable laws or regulations or would subject Singapore Exchange Limited (“SGX”) to any registration or licensing requirement. This document is not an offer or solicitation to buy or sell, nor financial advice or recommendation for any investment product. This document is for general circulation only. It does not address the specific investment objectives, financial situation or particular needs of any person. Advice should be sought from a financial adviser regarding the suitability of any investment product before investing or adopting any investment strategies. Use of and/or reliance on this document is entirely at the reader’s own risk. Further information on this investment product may be obtained from www.sgx.com. Investment products are subject to significant investment risks, including the possible loss of the principal amount invested. Past performance of investment products is not indicative of their future performance. Examples provided are for illustrative purposes only. While each of SGX and its affiliates (collectively, the “SGX Group Companies”) have taken reasonable care to ensure the accuracy and completeness of the information provided, each of the SGX Group Companies disclaims any and all guarantees, representations and warranties, expressed or implied, in relation to this document and shall not be responsible or liable (whether under contract, tort (including negligence) or otherwise) for any loss or damage of any kind (whether direct, indirect or consequential losses or other economic loss of any kind, including without limitation loss of profit, loss of reputation and loss of opportunity) suffered or incurred by any person due to any omission, error, inaccuracy, incompleteness, or otherwise, any reliance on such information, or arising from and/or in connection with this document. The information in this document may have been obtained via third party sources and which have not been independently verified by any SGX Group Company. No SGX Group Company endorses or shall be liable for the content of information provided by third parties. The SGX Group Companies may deal in investment products in the usual course of their business, and may be on the opposite side of any trades. SGX is an exempt financial adviser under the Financial Advisers Act (Cap. 110) of Singapore.  The information in this document is subject to change without notice. This  document shall not be reproduced, republished, uploaded, linked, posted, transmitted, adapted, copied, translated, modified, edited or otherwise displayed or distributed in any manner without SGX’s prior written consent.

Nikkei owns the copyright and any other intellectual property rights in the Nikkei Stock Average itself, and the method for calculating the Nikkei Stock Average and the like. All ownership of trademarks and any other intellectual property rights with respect to marks representing "Nikkei Inc.," "Nikkei," and "Nikkei Stock Average" belongs to Nikkei. Nikkei is not obliged to continuously publish the Nikkei Stock Average, nor is it liable for any error or delay in, or discontinuation of the publication thereof. Nikkei owns the right to change the content of the Nikkei Stock Average, such as the calculation method thereof, and the right to suspend the publication thereof. Nikkei does not give any warranty, nor is it responsible for any and all financial instruments and the like, which are based on, or otherwise refer to, the Nikkei Stock Average.

All rights in the FTSE China A50 Index (the “Index”) vest in FTSE International Limited (“FTSE”). “FTSE®” is a trademark of the London Stock Exchange Group companies and is used by FTSE under license.

The SGX FTSE China A50 Index Futures (the "Product") has been developed solely by Singapore Exchange Derivatives Trading Limited. The Index is calculated by FTSE or its agent. FTSE and its licensors are not connected to and do not sponsor, advise, recommend, endorse or promote the Product and do not accept any liability whatsoever to any person arising out of (a) the use of, reliance on or any error in the Index or (b) investment in or operation of the Product. FTSE makes no claim, prediction, warranty or representation either as to the results to be obtained from the Product or the suitability of the Index for the purpose to which it is being put by Singapore Exchange Derivatives Trading Limited.

Futures or options contract on any MSCI Index are not sponsored, guaranteed, endorsed, sold or promoted by MSCI, any affiliate of MSCI or any other party involved in, or related to, making or compiling any indexes (but expressly including the exchange) MSCI bears no liability of any kind with respect to such contracts