Huami's IPO Expected Thursday With 10 Million ADS's Up for Grabs

Smartwatch-maker Huami could raise up to $138 million from its IPO, fueled by the company's ranking as the world's top maker of wearable devices.

Ed Newton
    Feb 08, 2018 4:50 AM  PT
Huami's IPO Expected Thursday With 10 Million ADS's Up for Grabs
author: Ed Newton   

Shares of Huami Inc., the world's leading maker of smartwatches and other wearable devices, are expected to begin trading Thursday in an NYSE initial public offering valued between $100 million and $120 million. 

The offering is comprised of 10 million American depositary shares ranging from $10 to $12 apiece. Each ADS represents four ordinary shares. With the possibility of an over-allotment of 1.5 million ADSs, the company could raise up to $138 million, according to its filing with the Securities and Exchange Commission.

Huami, which is due to be traded on the NYSE with the symbol "HMI," has had a meteoric rise in sales in the past three years, with revenue increases of 74 percent in 2016 and 37 percent in the first nine months of 2017 compared with the year-earlier periods, according to its filing. In the first three quarters last year, the company reported revenue of $195 million and income of $14.3 million, a reversal from a loss of almost $3 million in the same period the previous year. 

For the two months ended Nov. 30, revenue rose 19 percent to $71.6 million from the year before with earnings nearly quadrupled to $7.9 million.

Huami shipped 11.6 million units in the first nine months of 2017, according to a Frost & Sullivan report, more than any other company, including those with globally recognizable brands, like Apple and Fitbit. Overall, the company has shipped more than 45 million units of its smartwatches and associated products since 2014, according to the company's head of marketing and sales, Frederik Hermann. The company shipped 6.5 million units of smart wearable devices in the fourth quarter of 2017, the filing said.

Looking forward, the market, which exploded from $1.7 billion in sales in 2014 to $16 billion in 2016, is expected to exceed $46 billion by 2021, with nearly 282 million devices sold annually, Frost & Sullivan projects. 

Huami produces all of the wearable devices sold by its allied company Xiaomi, which holds a 19.3 percent stake in Huami. Smartwatches produced by Huami are sold under the brands Amazfit and Mi Bands.

Underwriters on the deal are Credit Suisse, Citigroup, and China Renaissance.