Xiaomi unveils big loss as it prepares to hawk IPO to investors – Tech News

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Xiaomi's biggest business, smartphones that barely make a profit, declined in importance to just 67.5% of sales from more than 70% in 2017. — Bloomberg

Xiaomi Corp revealed it lost more than US $ 1bil (RM3.97bil) in the first three months, as the Chinese smartphone maker prepares to persuade investors to buy into the largest initial public offering since 2014.

The eight- year-old company has started gauging for the first time. It also published its first prospectus for the sale of China Depositary Receipts in Shanghai on June 11, saying it plans to use its global footprint. Xiaomi reported a 7bil yuan (RM4.36bil) net loss on revenue of 34.4bil yuan (RM21.42bil) in the first quarter.

Xiaomi is one of the most hotly anticipated Hong Kong coming-out parties in the years, taking advantage of new methods of attracting major homegrown technology companies to Hong Kong and China. The company, led by billionaire co-founder Lei Jun, is said to be about US $ 10bil (RM39.87bil) in an IPO that could become the world's largest first-time share sale since Alibaba Group Holding Ltd listed in the US in 2014. The CDRs – a signature reform to try and reverse an exodus of its largest companies to overseas bourses in recent years.

“In 2018, the company plans to enter or consolidate positions in the South-East Asian and European markets,” Xiaomi said in its Chinese prospectus, which did not mention a fundraising target. Xiaomi opened its first store in Paris last month, while the Senior Vice President Wang Xiang has said that he is in the US and compete against Apple Inc.

The Beijing-based company saw sales from more lucrative smart-home devices and internet services as a proportion of the total revenue in the first quarter. Roughly 31.8% of Xiaomi's revenue in 2018's first three months came from products such as air purifiers and scooters and online services such as mobile apps, according to the filing. Those two segments contributed 29% of sales in 2017.

Its largest business, smartphones that barely made a profit, declined in importance to just 67.5% of sales from more than 70% in 2017. Xiaomi said it made a profit excluding one -time items of 1.038bil yuan (RM641.30mil) in the first quarter.

Xiaomi survived a challenging 2016 to roar back to growth in 2017, bouncing back by revamping its sales model and expanding in India, where it rivals Samsung Electronics as the biggest vendor. It is said to be seeking a US $ 60bil (RM239.31bil) to US $ 70bil (RM279.19bil) valuation in an IPO sponsored by banks including CLSA, Goldman Sachs and Morgan Stanley in Hong Kong and CITIC Securities in mainland China. – Bloomberg


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