Xiaomi in $1b loss as phone shipments surge

Chinese smartphone maker Xiaomi booked a quarterly net loss of $1.1 billion (Dh4.04 billion), but also record overseas revenue and surging smartphone shipments ahead of its blockbuster initial public offering next month. Expectations of a highly sought-after IPO have grown after Xiaomi, founded only eight years ago, blew past its 100 billion yuan (Dh57.30 billion) sales target for 2017 with a couple of months to spare.

The Hong Kong IPO is expected to raise $10 billion and value Xiaomi at between $70 billion and $100 billion, sources have said. Stoking expectations, up to 30 per cent of the offering is expected to be sold as Chinese depository receipts on the mainland, in what is expected to be the first-ever CDR offering.

In its first prospectus for the CDR sale posted yesterday, Xiaomi did not provide a year-ago quarterly profit figure, but compared to the 7 billion yuan ($1.1 billion) loss for January-March to a net loss of 43.89 billion yuan for the whole of 2017.

Xiaomi, however, said that after adjusting for fair value changes of convertible redeemable preferred shares, it made a net profit of 1.04 billion yuan in the first quarter. That compares with 3.9 billion yuan profit for the whole of 2017. Its smartphone shipments jumped 88 per cent from the same quarter a year earlier thanks to strong growth overseas and at home, helping Xiaomi log revenue of 34 billion yuan for the period.