Smartphone maker Xiaomi said it had made a loss of more than $1 billion (£750m) in the first quarter, ahead of a massive planned initial public offering.
The expected valuations for eight-year-old Xiaomi, which has yet to turn a profit, have fluctuated dramatically over the past few months, dropping from a high of $100bn to around $60bn-$70bn.
It’s hoping to raise $10bn from the IPO, with about half that coming from mainland Chinese investors, Bloomberg reported, citing unnamed sources.
The planned investment from mainland China is much larger than was initially expected. Since Xiaomi began the IPO process, China has accelerated its drive to bring more large-scale listings to the mainland.
Earlier this month Reuters reported Xiaomi was planning to sell about 30 percent of its stock to mainland Chinese investors.
Xiaomi published its first prospectus for mainland investors in Shanghai this week, disclosing a loss of RMB 7bn ($1.1bn, or £820m) in the first quarter.
The company, which also makes smart home devices such as rice cookers and air purifiers, said it wants to use the new funds to expand beyond China and back the development of new devices and media services.
“In 2018, the company plans to enter or consolidate positions in Southeast Asian and European markets,” Xiaomi said in the Chinese prospectus.
Xiaomi opened its first Paris shop in May and has said it wants to sell smartphones in the US to compete with Apple.
Revenues for the first quarter amounted to RMB 34.4bn, compared to RMB 114.6bn for all of 2017, Xiaomi said.
The Beijing-based company saw its largest business, low-priced smartphones with low profit margins, decline in importance to 67.5 percent from more than 70 percent last year. Xiaomi said it made a profit of RMB 1.038bn in the first quarter excluding one-time items such as staff compensation.
More lucrative smart home devices and internet services, including scooters and mobile app sales, grew to 31.8 percent of revenues for the first quarter, the filing said.
Xiaomi’s operating profit was RMB 12.2bn in 2017, triple the previous year.
The firm was once the world’s most valuable start-up, but was hit by disruptions before returning to growth last year.
Its IPO would be the world’s biggest first-time share sale since Alibaba’s US listing in 2014.
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