Blacklist Status on Xiaomi Officially Lifted; FTSE Takes Back Prodigal Son

Also, revenues and profit were solid in Q1.
May. 27, 2021 05:30
Blacklist Status on Xiaomi Officially Lifted; FTSE Takes Back Prodigal Son

Xiaomi Corp. (HKEX: 1810) has been officially removed from Washington's Chinese military blacklist and is going back onto the global indexes.

The smartphone giant said in a filing with the Stock Exchange of Hong Kong Wednesday that "The U.S. District Court for the District of Columbia issued a final order vacating the US Department of Defence's designation of the company as a [Communist Chinese Military Company]."

The news follows a preliminary injunction by Judge Rudolph Contreras and a court order earlier this month lifting the CCMC designation that banned U.S. investment in the firm. In mid-May, the U.S. Defense Department agreed, saying Xiaomi's removal from the blacklist "would be appropriate."

This, and a similar decision on Luokung Technology Corp. (Nasdaq: LKCO), were a win for U.S.-listed Chinese companies, though a number of delisted firms including oil giant CNOOC (HKEX: 0883) and telecom giant China Mobile Ltd. (HKEX: 0941) have so far failed to get their appeals reversed.

On Tuesday, FTSE Russell said it will add both Xiaomi and Luokung back to its global indexes. As Reuters reported, Xiaomi will be added to FTSE GEIS in two tranches, with 50% added effective from the open on June 7, and 50% added from the open on June 21. Luokung will be added to FTSE GEIS effective from the open on June 21.

On Wednesday in Hong Kong, Xiaomi's stock ended 1% higher, at HK$28.15 per share. In the U.S., data on over-the-counter XIACY shares was not yet available. XIACF stock jumped 3% to $3.60 per share.

The stock in Luokung jumped 7% on Wednesday in New York, to $1.42 per share.

The chairman of Xiaomi, Lei Jun, said in the statement today, "The company reiterates that it is an open, transparent, publicly traded, independently operated and managed corporation."

Also on Wednesday, Xiaomi reported better-than-expected results for the first quarter. Revenues hit $12 billion, up 55%, while net profit rose 261% year-over-year to $1.2 billion. Xiaomi noted strong domestic and overseas smartphone sales and expressed concern over the growing chip costs.