$2.7b How much Xiaomi's profits are estimated to reach next year.
HONG KONG • Chinese smartphone maker Xiaomi has told bankers it would top its annual revenue target by as much as 18 per cent, sources with knowledge of the matter said, marking a comeback from a sales slump in recent years that triggered a business overhaul.
Xiaomi, which has been hearing bank pitches for what could be the world's biggest tech float next year, will rake in a net profit of at least US$1 billion (S$1.34 billion) this year, banker projections based on the company's revenue estimate of US$17 billion to US$18 billion show. Profits are estimated to reach about US$2 billion next year.
The calculations also take into account data on operating costs provided by the company, said the sources with knowledge of the discussions. They spoke on condition of anonymity because the information was not public.
Bankers and analysts expect Xiaomi's profits to continue growing sharply into 2019, which one source said would make a US$100 billion valuation at IPO look "reasonable".
A spokesman for Xiaomi - that is expected to soon mandate its leading banks for an IPO - confirmed the company had topped the annual revenue goal, of about US$15 billion, but declined to comment on IPO-related matters or its financials.
Xiaomi was valued at US$46 billion in a 2014 funding round, the world's most valuable start-up for a brief period. It sales stagnated over the next two years as the firm overextended itself launching in new markets while being hammered at home by rivals, including Huawei Technologies, Vivo and Oppo.
The maker of budget smartphones has since branched out into selling accessories and home appliances. In the third quarter of this year, Xiaomi overtook Apple to become China's No. 4 smartphone vendor, according to International Data Corp.