Xiaomi is presently in the process of concluding an extremely successful year, having recently told bankers it’s beating its yearly revenue target by up to 18 percent, Reuters reported on Friday, citing people familiar with the company’s expectations. As the Chinese OEM estimates its annual revenue to reach between $17 and $18 billion, some finance experts believe that figure can translate to $1 billion in net profit, i.e. earnings after all taxes and other expenses. Investors are likely to find such an achievement remarkable, especially given Xiaomi’s traditionally thin profit margins that are a result of its aggressive expansion strategy and a highly competitive approach to product pricing. According to the same sources, the Beijing-based tech giant is internally projected to have its net profits double in 2018.
Following several years of underwhelming performance that saw the company fail to maintain its 2014 momentum following its latest financing round and a massive valuation of $46 billion, Xiaomi decided to reorganize its operations after stretching itself too thin. Coupled with increasingly lucrative commitments to India where it’s currently close to overtaking Samsung as the largest phone vendor in the country, the firm was able to bounce back and reinvigorate investors’ optimism regarding its prospects. While an initial public offering was never highlighted as one of the company’s main goals, the idea of organizing one anyway emerged at some point this year once it became clear that Xiaomi is set to bounce back in an impressive fashion, according to previous reports. The firm is said to presently be in the process of evaluating IPO pitches from banks as it has yet to decide whether to go public in New York or Hong Kong, though the latter scenario is understood to be far more likely.
With Xiaomi reportedly targeting a $50 billion valuation at a minimum, it’s believed to be the subject of the world’s largest tech IPO in 2018 as it looks to cash in on its newfound momentum by securing additional resources for both expanding and strengthening its global operations. The company‘s next major ambition is establishing itself as a major phone brand in the United States as it’s currently said to be negotiating with a number of stateside wireless carriers — the biggest smartphone distributors in the U.S. — like Verizon and AT&T who may start retailing its devices as soon as next year.