Chinese smartphone manufacturer Xiaomi is planning an initial public offering (IPO) on the Hong Kong Stock Exchange that could raise as much as $10 billion from the sale of a minority stake in the company.
If the plans go ahead, it would be one of the biggest IPOs since ecommerce giant Alibaba raised $25 billion after going public on the New York Stock Exchange in 2014.
Reuters' sources claim that the company is likely to be valued at between $80 billion and $100 billion, while its IPO documents indicate that the company pulled-in revenues of 114.62 billion yuan ($18 billion) in 2017, up by 67.5 per cent on 2016.
Another source suggested that the valuation is likely to be closer to $70 billion. Either way, the firm could end up becoming China's third most valuable publicly listed technology firm, after Tencent and Alibaba.
It is thought that the IPO could be completed as early as June, with around 15 per cent of the company offered to investors. The company will allocate the funds raised to three main areas of its business: research and development, investments, and foreign expansion.
To coincide with the filing of the papers, Xiaomi also published its most recent financial results. The company said revenue grew by 67.5 per cent to 114.62 billion yuan ($18bn) last year.
Meanwhile, it saw operating profit of 12.22 billion yuan, which is an increase of 3.79 billion yuan compared to the previous year. Overall, though, it posted a net loss of 43.89 billion yuan ($6.9bn), but claimed that this was due to fair-value changes in the accounting treatment of convertible redeemable preference shares.
In an open letter submitted as part of the IPO filings, chairman Lei Jun said that the company had grown "quickly" over the past few years despite not having an "adequately strong foundation" to face challenges.
"We deliberately slowed our growth to focus on strengthening three key aspects of our business: innovation, quality and supply management," he said.
"We are building an open global ecosystem, and not a walled garden. With the era of big data and AI upon us, we believe that the high volume of data generated by our ecosystem will allow us to better understand our users' needs and give us a significant edge to offer improved products and services."
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