Tag: xiacy

How Can I Buy Shares in Xiaomi (XIACY or 1810) on the Public Stock Market?

Buying Xiaomi American Depositary Receipts (ADRs):

  • This is the simplest and most common way for US investors to buy Xiaomi stock.
  • ADRs represent shares of a foreign company (in this case, Xiaomi) that are traded on a US stock exchange.
  • Xiaomi’s ADR trades under the ticker symbol XIACY on the OTC Markets.

Buying Xiaomi shares directly on the Hong Kong Stock Exchange (HKEX):

  • This method allows you to buy actual shares of Xiaomi (stock code: 1810), but it’s a more complex process and not recommended for all investors.
  • It typically involves opening an international brokerage account that allows trading on the HKEX and navigating potential currency conversion and other fees.

How has Xiaomi grown so quickly?

Xiaomi is a very interesting company with a very interesting business model.

The vast majority of phone manufacturers around the world create a smartphone with a cost of around $100 and then they spend a huge amount of money on marketing and branding. The company then believes that the smartphone has a much higher percieved value – so they sell it for $400 or above.

Xiaomi doesn’t do this!

Xiaomi is aiming to sell all of its products as close as possible to their costs – as they want to have as many products available in the world as possible.

Once out in the world and being use – Xiaomi then looks to drive revenues from providing software and services around these products, which has a much higher margin that the hardware itself. Thus, driving higher demand, more product adoption and thus more revenues from services.

What is the Difference between Xiaomi XIACF and XIACY?

If you searched for Xiaomi ADRs, you’ve inevitably come across both XIACF and XIACY. What’s the difference? You cannot trade XIACF as a retail investor because it’s a “privately placed” ADR under SEC Rule 144A. This means that they’re for qualified institutional buyers (QIBs) only. QIBs want and contribute to the 25x higher average trading volume than XIACY. Volume ensures there are enough buyers and sellers to trade with you. Information and services are also limited to QIBs.