People  stand in front of Xiaomi's logo in Beijing. Picture: REUTERS
People stand in front of Xiaomi's logo in Beijing. Picture: REUTERS

Hong Kong — Chinese smartphone maker Xiaomi has asked banks to pitch next Friday for an initial public offering (IPO) in 2018, people familiar with the plan told Reuters. Xiaomi was valued at $46bn in a 2014 funding round completed before its sales stagnated. More recently it has seen expectations of its value pick up following strong results in 2017.

Its float could be the world’s "largest technology IPO" in 2018, according to one of the people.

"It is huge," said another source, who added that even a valuation of $100bn would "not be a crazy number".

The world’s most valuable start-up for a brief period in 2014 was worth about $55bn at the end of June, according to one person close to the company.

But two other people familiar with the company’s discussions said it should be worth much more if a valuation were based on its expected earnings.

Xiaomi did not comment.

The maker of budget smartphones experienced sales stalling in 2016 as it tried to expand internationally while battling intense competition from Chinese rivals Huawei Technologies, Vivo and Oppo.

At the time it pulled back from several overseas markets including Brazil and Indonesia, but this year it has launched and relaunched sales in dozens of countries such as Indonesia, Vietnam, Russia, the United Arab Emirates and Ukraine.

It has overtaken Apple to become China’s fourth-largest smartphone vendor by sales, driven in part by a focus on offline stores, according to research firm Canalys.

The smartphone group’s listing plan comes on the heels of a slew of successful Chinese tech and fintech initial public offerings in recent months.

Already a strong pipeline is building for 2018, with public floats expected from Meituan-Dianping, an online local services group valued at $30bn, and Lufax, a wealth management platform worth $18.5bn as of its last funding round.

Xiaomi’s founder, Lei Jun, had said the company would not go public until 2025, but a bull run in the stock market and its promising financial numbers have sped up the initial public offering plan, say the people.

Xiaomi was expected to choose either Hong Kong or the US as its listing venue, according to the people, who declined to be named as the discussions were confidential.

In early November 2017, Xiaomi launched in Spain — its first foray into western Europe as it revived a stalled global push into other developed markets around Europe and the US.

Reuters

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