Technology titan Xiaomi has postponed its application for a China depository receipts offering, while the domestic A-share market has seen a continued downturn in the past few days.

The Beijing-based smartphone vendor has applied to the China Securities Regulatory Commission to suspend the review of the issuance, as it plans to complete a separate initial public offering in Hong Kong first and then "pick a time" to issue CDRs, the company said in a statement on Tuesday via microblogging platform Sina Weibo. It did not give a reason for the postponement.

The CSRC said in a separate statement that it has canceled the review of Xiaomi's CDR application scheduled for Tuesday.

Xiaomi is the first Chinese company to apply for CDRs, a form of equity that allows Chinese investors exposure to overseas bourses. CDRs are part of the central government's broader efforts to lure competitive Chinese internet and tech giants back home.

Industry experts said under pressure from both internal and external factors, the continued slump in the stock market would affect the CDR offering.

"There are deep divisions among domestic investors on Xiaomi's valuation. Thus the planned issuance may not be helpful for the firm's overall plan in the capital market," said Shen Meng, director of boutique investment bank Chanson & Co.

According to Shen, neither Xiaomi nor the regulator want to carry the burden of starting a CDR offering that may depress the stock market.

Dong Dengxin, director of the Finance and Securities Institute of Wuhan University of Science and Technology, said the delay to the CDR issuance would not affect the Hong Kong listing.

"However, the postponement may affect the future CDR offering process. Considering the potential risks, other enterprises eyeing CDR offerings may delay their plans as well," Dong noted.

Xiaomi reported a 7 billion yuan ($1.08 billion) net loss on 34.4 billion yuan revenue in the first three months of this year. Excluding one-time items, the firm said it made a profit of 1.04 billion yuan.

In May, Xiaomi filed an application for the listing in Hong Kong, which is expected to make it the largest flotation in the world since 2014, when e-commerce giant Alibaba Group Holding Ltd listed in the United States. According to market sources, Xiaomi is expected to raise about $10 billion in the Hong Kong and CDR offerings.

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