Despite Xiaomi's (HK:XMGP) 597-page long initial public offering filing, which was filed earlier this month, investors have already raised questions on the company’s IPO goal of raising around $10 billion at a $100 billion valuation when the Chinese technology company launches its IPO in a couple of weeks.
Xiaomi is expected to launch its share IPO this coming June 7. The IPO of the company is expected to be one of the biggest in the past ten years since the debut of Alibaba (NYSE:BABA) Group Holdings on the New York Stock Exchange a couple of years ago.
Recent reports have recently revealed that the company’s valuation may begin by as much as $60 billion. These reports have not been confirmed by Xiaomi while sources have refused to be identified.
The company which started last 2010 known for its quality but affordable smartphone devices initially expected to have a valuation of around $30 billion for its IPO which may be the reason behind investors raising questions and concerns regarding the $100 billion target of the company.
Others have pointed out that the early stage where the company is currently in is a factor on the concerns from investors with the company possibly being overvalued due to the growing uncertainty surrounding the IPO launch.
While Xiaomi is currently one of the top smartphone makers in terms of market share, revenue of the company in 2017 came in at $18 billion which is less than half of that of Apple Inc (NASDAQ:AAPL).
Despite this, the company has been expanding its business in the past year. Aside from its smartphone business, the company have entered the Western market and have increased its offerings in terms of internet of things as well as its lifestyle products whose share in their revenues have grown from 13% to as much as 20%.
However, some have pointed out that the whole company, based on the metrics of other companies who have gone public, could be valued by as much as $250 billion with their total operating profit and investors seeing a valuation of $80 billion.