Xiaomi will make a net profit of $1 billion or more next year
Chinese smartphone maker xiaomi has told investment Banks that the company’s revenue will be 18 per cent higher than expected this year, sources said on Friday. It marks a recovery after a slump in sales in recent years and a radical overhaul of the business.
It is understood that xiaomi has invited a bid to submit its bid for the company’s initial public offering next year. Xiaomi’s initial public offering is expected to be the world’s largest technology company by next year. According to xiaomi’s $17 billion to $18 billion revenue forecast, the investment bank expects xiaomi to make at least $1 billion in net profit in 2017 and about $2 billion next year.
The company also took into account the operating cost data provided by the company when calculating xiaomi’s profits, sources said. Investment bank analysts expect the high growth in xiaomi’s net profit to last until 2019, which makes it “reasonable” for xiaomi to make its initial public offering of $100 billion.
The company will soon commission a joint underwriter to launch its initial public offering, sources said. A xiaomi spokesman confirmed that the company’s revenues this year had exceeded the annual revenue target of about $15 billion, but declined to comment on issues related to the ipo and financial data. “We have never disclosed any net income or growth data expectations, and we will not comment on irresponsible speculation or speculation,” she said.
Xiaomi, which was valued at $46 billion in 2014, was once the world’s most valued start-up. But the company’s sales have stalled as xiaomi has overextended overseas in the next two years and has been eroded by rivals such as huawei, OPPO and vivo in the domestic smartphone market. Xiaomi then expanded into areas such as accessories and home appliances. Xiaomi overtook apple as the fourth-largest smartphone maker in China in the third quarter, according to market research firm IDC.
“For xiaomi, it’s a good time to go public, because they’re developing very well now,” said Kiranjeer Kaur, senior research manager for customer services at IDC. “If they can get the ideal valuation, they will go public now.” But Mr Kaur also warned that xiaomi needed to focus on retaining users. “Xiaomi needs to ensure that users can upgrade from low-end xiaomi phones to high-end xiaomi products instead of using other branded products.”
The Information technology news website The Information reported earlier this month that xiaomi was considering an initial public offering in 2018. It is reported that xiaomi is likely to select the Hong Kong stock exchange, but the options on the New York stock exchange are not ruled out. The company has previously reported that the company is preparing to go public, but officials have repeatedly denied the news. Zhou, the chief financial officer, said in September that the listing was not a priority for xiaomi, given the company’s cash flow and other financial conditions.