Chinese billionaire Lei Jun: founder, chairman and CEO of Xiaomi Getty Images

Several mega-funded Chinese tech unicorns, including smart phone and electronics maker Xiaomi, may be angling to go public later this year with huge, multibillion-dollar offerings, heightening investor interest in China's booming technology sector. Behind the scenes, New York and Hong Kong are competing for these listings. At stake could be deals worth well more than a quarter-trillion dollars. "Collectively, once these China tech companies start trading, they could surpass market capitalization of a couple hundred billion dollars or more," said David Williams, founder and CEO of investment banking firm Williams Capital Advisors in Palo Alto. Matt Kennedy, an analyst with Renaissance Capital, agrees. "This year could be an even bigger year for China IPOs," he said, noting many will be mega offerings. Last year 137 Chinese companies went public, collectively raising $32.2 billion, according to Renaissance Capital. Tech IPOs were among the best performers of the year, including Apple supplier Foxconn, which raised $347 million at a valuation of $2.3 billion; and Tencent-backed China Literature, which raised $1.1 billion at a valuation of $6.4 billion. Both companies listed on the Hong Kong Stock Exchange. Sixteen Chinese firms went public and collectively raised $3.4 billion on U.S. exchanges, more than double the number in 2016, according to Renaissance Capital. Notable ones: Tencent-backed mobile search engine Sogou; five Chinese online lenders, including Qudian and PPDai; Alibaba-backed logistics firm Best; as well as four education companies, including Bright Scholar Education. More from Global Investing Hot Spots:

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Chinese private fund assets hit a staggering $1.63 trillion So far this year, the Chinese IPO pipeline remains robust. Momentum is building for Xiaomi, the Beijing-based maker of the popular Mi smartphone series, to list on the HKSE, according to one informed source. Xiaomi may go public in the second half of 2018 at a valuation of about $50 billion, according to some reports.

Other unicorn-funded Chinese tech companies could soon follow with IPOs, including ride-sharing service Didi Chuxing; e-commerce site Meituan-Dianping, now valued at $30 billion; and news aggregator ByteDance, according to investment banking and venture capital sources.

Kennedy also notes that Ant Financial, the world's largest mobile and online payments platform, formerly known as Alipay; Lufax, an online wealth-management company; China Tower and Sinopec Marketing are strong IPO contenders.

An exchange showdown

New York is the traditional home for China's new economy company IPOs, particularly those with an international footprint or overseas expansion strategies and ambitions. Its biggest win and breakthrough came in 2014 when China's e-commerce giant Alibaba snubbed the Hong Kong Stock Exchange and chose to list on the big board. Alibaba's $25 billion IPO ranks as the largest in history. Typically, New York has offered higher valuations, a deeper pool of tech-savvy investors, a more flexible listing system that includes dual-class shares, and the prestige of being the world's biggest market. Hong Kong's lure is its familiarity with China, its convenient time zone for Asian executives and the Stock Connect schemes linking trading in Shanghai and Shenzhen with Hong Kong, which can build Chinese interest once shares have listed. The links don't yet allow IPO investments. In response to Wall Street competition, Hong Kong has been hard at work on pending reforms to attract China's tech darlings. These include allowing dual-class shares that give founding shareholders greater voting power than others, common among innovative new economy companies with the aim of reducing short-term investor pressure and focusing on strategic growth. Hong Kong's new listings rules, which could take effect this June, also extend to permitting pre-revenue biotech companies to list and allowing secondary listings of innovative companies already listed in the United States and U.K. But challenges remain for Hong Kong, such as a preference among China tech founders who have historically favored Nasdaq or NYSE for international clout and profile. "New York has been considered the trophy IPO among Chinese entrepreneurs," said Hans Tung, managing partner of venture firm GGV Capital. "Now Hong Kong is making moves to be more company friendly. It will be Hong Kong's to lose." Exchanges are eager to attract a crop of venture-backed Chinese tech titans to go public, and their private equity and venture capitalist backers certainly don't mind getting liquidity from their sizable investments made several years ago in China's emerging technology players. The No. 1 consideration when it comes to listing decisions is public market valuation. Didi Chuxing, the world's second most highly valued unicorn technology company (after top-ranked rival Uber) has funding from Matrix Partners, Tiger Global and SoftBank, valuing it at a stratospheric $56 billion. Didi is angling toward an IPO in New York that could take place this year or next, according to informed US-China venture sources. The company now services 400 cities in China.

A user holding a smartphone with a Didi Chuxing app. Zhang Peng | LightRocket | Getty Images

A swing factor that may make one of the New York exchanges attractive is Didi's goal to expand its business overseas. Last year Didi set up an international division and an R&D lab in Mountainview, California, to develop A.I. and self-driving technology. China's online content platform ByteDance, the company behind unicorn-valued news app Toutiao, could also list in New York following its recent, near-$1 billion acquisition of U.S. video-sharing app Musical.ly.

Dual-class listings

A possible IPO of Xiaomi on the HKSE later this year would play into pending reforms. The changes come after the Hong Kong exchange lost the mega $25 billion IPO of e-commerce giant Alibaba to the NYSE in 2014 over issues related to the controversial dual-class voting structure. "Alibaba became the largest global IPO, and its market cap astounded the Hong Kong government and woke them up to the need to make changes," said VC investor Tung at GGV Capital, a lead early investor in Alibaba. Under HKSE, CEO Charles Li, a former financial executive with J.P. Morgan China and Merrill Lynch and head of the exchange since 2010, a greater recognition and understanding of the needs of the region's capital market is needed. Pressure has been building to make it easier to list in Hong Kong. "We've reached a clear consensus that capital market access in Hong Kong should be broadened to maintain the city's role as a leading international financial center," Li noted recently in describing the new proposed rules.

Hong Kong in transition