Chinese phone maker Xiaomi likely first to issue CDR
Sources say the tech unicorn is the only firm to have filed for a Chinese Depository Receipt qualification with the CSRC
A source close to the China Securities Regulatory Commission confirmed that they have received only one application for the qualification to issue a CDR so far, combating rumors that 28 companies have been given the green light, Securities Daily reported.
The only application was filed by tech unicorn Xiaomi, a Chinese phone maker, the source confirmed.
According to the report published by Shanghai Securities Journal, insiders think the reason why Xiaomi can move fast on its CDR application, is that Xiaomi’s valuation is not fixed, as it has not listed on any market yet. While for other public tech giants, their overseas valuations are relatively high and thus need to be reviewed.
At present, investors, especially cornerstone investors, have given the company valuations ranging from US$75 to 80 billion, while some have given it more than US$80 billion.
CDR, or Chinese Depositary Receipt, which are surrogate securities, allow domestic investors to hold shares of overseas-listed innovators, such as Chinese internet giants like Baidu and Alibaba. It is part of the Chinese government’s effort to bring back high-tech and “new economy” companies to the A-share market.