By Joyce Yu
Philadelphia, PA–One more Chinese tech giant may go public on the New York Stock Exchange. Reports say Chinese smartphone maker Xiaomi has chosen three investment banks – Citic Securities, Goldman Sachs and Morgan Stanley – as the joint sponsors for its proposed IPO. The location of the potential IPO could be in Hong Kong or New York.
The initial public offering, valuing the company at up to $100 billion, could be the world’s biggest tech float this year, according to several media reports including Reuters’ and Financial Times’. This would also make Xiaomi the biggest tech IPO since Alibaba floated in New York in 2014. Xiaomi and the banks have declined to comment.
One of the emerging Chinese smartphone makers in recent years, Xiaomi offers compatible features in its devices as western brands but at a lower cost. While some analysts are skeptical of the $100bn price tag, there are bankers who said that it was possible.
“Based on the numbers we’ve seen, they’ve absolutely restructured the business,” one banker told the Financial Times. “It’s profitable now, they have got a strategy around creating an ecosystem of connected devices that they are able to monetize through value added services.”
Xiaomi went through a difficult period last year for expansion plans that burnt through its cash. Hugo Barra, a former Google executive who joined Xiaomi in 2014, left at the start of last year to go to Facebook. Following its new strategy, however, Xiaomi appears to have turned a corner in the middle of last year.
Ranked behind Huawei, Oppo and Vivo in China by handset sales, Xiaomi however has moved on to India and is now aiming for Europe. With growing sales, Xiaomi is quickly expanding its suite of products, from smart fitness bands to televisions, drones and virtual reality headsets. Without breaking into the US market, Xiaomi and another Chinese player Huawei have been able to rank in the top five smartphone vendors globally. Both are reportedly in talks with Verizon and AT&T about selling their flagship smartphones to US consumers in 2018, according to a recent Bloomberg report.