(Yicai Global) Jan. 15 -- Shares of Xiaomi, which has been tipped to become the world’s third-largest smartphone maker this year, sank after the US government yesterday added it to a roll of firms with alleged connections to the Chinese military. 

The outgoing Trump administration enrolled nine Chinese companies, including China National Offshore Oil and Commercial Aircraft, on the no-buy list in a last-minute clean-sweep before leaving office. President Donald Trump signed an executive order in November banning US investment in Chinese firms alleged to have military links.

Beijing-based Xiaomi has “always conformed to its legal and compliance operations, and abided by relevant laws and regulations of the places of its operations,” it said in a statement. “The company confirms it is not owned, controlled by or related to the Chinese military, nor does it fall within the [terms of the] US National Defense Authorization Act as a Chinese military company.”

Xiaomi vowed to “take appropriate measures to protect the interests of itself and its shareholders,” adding that it is assessing the potential impact on the company. The firm plans to make a further statement in due course.

At the end of last year, Xiaomi launched its new flagship phone, the Mi 11, the first to feature Qualcomm's latest signature mobile processor the 5 nanometer Snapdragon 888 fifth-generation wireless communications network-enabled chip. If blocked by the US, Xiaomi may be cut off from Qualcomm chips and other products from the American supply chain. 

Xiaomi is expected to surpass Huawei Technologies, which has sold its Honor handset brand, to rank as the world’s third-biggest phone maker in 2021, according to a recent report from market researcher TrendForce.

Third-quarter revenue at Xiaomi jumped 34.5 percent to CNY72.2 billion (USD11.2 billion), while its adjusted net profit rose almost 19 percent to CNY4.1 billion. That rapid growth stems from its quick snatch of market share from similarly sidelined Huawei.

Editor: Ben Armour, Xiao Yi