Preliminary valuations of Chinese smartphone maker Xiaomi ahead of its landmark IPO are as high as $94 billion, Caixin reports.
This sky-high valuation would make Xiaomi’s shares twice as expensive as those of market leaders Apple in price-to-earnings terms. The lowest estimate for Xiaomi, provided by Swiss bank UBS, still values the company at around 30 times its projected earnings for 2019. By comparison, Apple’s capitalization is 14.5 times higher than its earnings.
Sources told Caixin that the banks’ valuations exceed the market’s expectations, particularly in light of recent financials that pointed to a first quarter loss for Xiaomi. The banks themselves have justified their lofty estimates based on Xiaomi’s prospects as an internet service provider, which currently makes up a small but fast-growing revenue stream for the company.