Xiaomi announced on Wednesday that its controlling shareholders pledged not to sell their holdings of Xiaomi's shares either indirectly or directly, except for charity donations.
The commitment was made due to shareholders' confidence in the company in the long-term, including its founder Lei Jun, Smart Mobile Holdings Limited and Smart Player Limited, the company said.
Xiaomi's six-month lockup period for its shares is set to be lifted on Wednesday, and by then, the 3 billion shares, or 19 percent of its total issued shares will be freed.
Xiaomi went public in Hong Kong on July 9 last year, with an issuance price of 17 HKD per share. The share price plunged after the listing. Investors are now free to sell all their shares from the company.
Morgan Stanley said in its report that Xiaomi's smartphones are making inroads into overseas markets, especially in Western Europe. However, the domestic market is rather stagnant, with Samsung carrying out an aggressive low-price strategy recently. The financial service company projected Xiaomi's Indian market share might face challenges in the coming year.
The share price of Xiaomi closed at 11.1 HK dollars on Tuesday, down by 7.5 percent, the lowest point since its listing in Hong Kong.
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