Chinese smartphone maker Xiaomi Corp is eyeing an initial public offering next year, possibly in Hong Kong, Bloomberg reports, citing people familiar with the matter.
The Beijing-based company is seeking a valuation of at least US$50 billion as it discusses the IPO plans with investment banks, the report said.
While banks have talked up Xiaomi’s prospects as they seek to win the mandate, they have concerns about whether the firm can reach the US$50 billion level, much less a US$100 billion target that some top executives have embraced, sources were quoted as saying.
In its last fundraising round in 2014, Xiomi was valued at US$46 billion.
For the planned IPO, banks have suggested Hong Kong as the most likely venue, the report said.
Founded in 2010, Xiaomi, or ‘Little Rice’ in Mandarin, was once the most valuable startup in the world. The company has been successful in luring consumers through smart marketing, aggressive devices and a strong focus on online channels.
But the company stumbled last year, with shipments falling at home amid fierce competition from rivals such as Huawei, Oppo and Vivo.
According to research firm IDC, Xiaomi ranked only fifth in Chinese phone shipments in the first quarter this year.
But the firm made huge strides overseas, especially India where it‘s now on the verge of surpassing Samsung Electronics in the world’s fastest-growing smartphone market.
A successful IPO may bring it at least US$5 billion for Xiaomi, much-needed ammunition for expansion, according to Bloomberg sources.
Xiaomi, led by Lei Jun, often dubbed China’s answer to Steve Jobs, is making a shift towards relying on brick-and-mortar stores.
The company plans to build 1,000 “Mi Home” stores by 2019, targeting 70 billion yuan of retail sales by 2021.
Hong Kong’s tech IPO market has been heated up in the second half of 2017. ZhongAn, the biggest fintech listing in Hong Kong history, raised US$1.5 billion in September.
Tencent’s e-book unit China Literature raised US$1.1 billion and locked in investor capital of more than HK$520 billion, the second largest in Hong Kong IPO history.
In another deal, gaming equipment maker Razer, backed by billionaire Li Ka-shing, raised around US$528 million last month.
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