Xiaomi files for landmark Hong Kong IPO

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As Reuters reports, the listing could value Xiaomi at $100 billion, nearly five times what fellow Chinese tech firm Alibaba raised in 2014.

Xiaomi could be the biggest IPO since Alibaba's $25 billion debut in 2014. Moreover, the operating profit of the company for the year 2017 stood at 12.22 billion yuan which grew from 3.79 billion yuan in 2016.

But the company said that 8.6 percent of its revenue and 39.3 percent of gross profit a year ago came from Internet services such as advertising and gaming on its MIUI user interface, which had 190 million monthly active users at the end of March.

The filing said the company posted a loss of 43.9 billion yuan ($6.9 billion) in 2017, but that revenue jumped 67.5 percent to 114.5 billion yuan. Xiaomi is also likely to be among the first Chinese tech firms seeking a secondary listing in its home market, using the planned China depositary receipts route, two people with knowledge of the matter said. China's State Council has approved plans to introduce CDRs, however, timing and details are unclear.

"Investors will like Xiaomi's business model because growing user numbers guarantee profits in the future", said James Yan, an analyst at Counterpoint.

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Xiaomi, in its deliberate move, is trying to pour huge investments and expand beyond borders. They have also been in talks with the U.S carriers to bring Xiaomi to the American market.

While Xiaomi is present in 74 countries and regions, it is yet to crack the USA smartphone market, something that it intends to do this year.

The company also make other internet connected devices and home appliances apart from smartphones.

The company suffered through some challenges in past years. In March this year, Xiaomi's count went up to 190 million monthly active users, but the report doesn't have a corresponding revenue figure. But the company then ran into trouble, suffering a drop in smartphone sales in 2016 as it struggled with supply chain problems. In India - the most promising market for Xiaomi - the intensified competition from the newbies, likes of Vivo, put the company on toes. It has enjoyed particularly strong growth in India, where it has overtaken Samsung as the biggest selling smartphone maker. "Xiaomi has more exposure to global expansion opportunities right now". It sells a variety of consumer electronics and IOT based gadgets. These devices include scooters, air purifiers and rice cookers and much more, however, the company drives most of its profits from internet services.

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