Xiaomi has been under the spotlight since its IPO. Shares prices have had some interesting level changes. Find out more about the Chinese giant’s current state of affairs.
Xiaomi recently grabbed the headlines due to its somewhat underwhelming IPO on the 9 July. Share prices were thought to have a very high valuation with the price-to-earnings ratio immediately drawing a familiar comparison to Apple. Despite the (unsurprising) slow start, the IPO was hailed as the biggest and most significant for a Chinese tech company. The IPO raised $4.7 billion, at a valuation of about $54 billion.
What is Xiaomi and what’s its story?
Xiaomi first emerged as a value-priced smartphone manufacturer from Beijing. It was founded in 2010 by the serial entrepreneur and angel investor Lei Jun, who currently serves as both the chairman and CEO of the “Apple of China”.
Their smartphone product range has more recently expanded to several lines, including a successful foray into a more premium product – Mi Mix Series. This smartphone series was the first to boast an edge-to-edge display. It wasn’t long before their sleek product design and charismatic leadership drew comparisons – by both analyst and consumers – with the Cupertino based company.
Where are they headed?
Xiaomi’s CEO, Lei Jun has expressed his dislike of the comparison with Apple, stating they want to be like Costco. The ever-expanding product line seems to be in accordance with the company’s intention. No longer limited to “just” smartphones, it currently offers a wide range of electronic gadgets and appliances such as: tablets, smart bands, appliances, air purifiers, speakers, smart TVs, and even electric scooters.
As for revenue, the lion share comes from their domestic market. China accounts for 72% and the remaining 28% from the rest of the world. India has become a strong market for Xiaomi but it’s the Western markets that show greatest growth promise.
And from an investment perspective?
The tech giant had a strong year, making $1.2 billion in profit in 2017. Co-founder and Senior Vice President, Wang Xiang stated the company has set its sights on the US market. The speed at which it is able to develop and deliver product lines puts it in a privileged position to step into the US over the next year.
The company will start developing its smartphones to be compatible with US networks. If its implementation in the US market is successful, it could generate an immense new source of revenue for the company. At present, all of Xiaomi’s efforts to expand to new markets have been remarkably successful.