From Apparent Ruin To IPO

Xiaomi, China’s onetime smartphone king, is betting on India and super-profitable apps

On the lower floors of Beijing’s Rainbow City mall, hundreds of people are shopping, dining with their families, and generally reveling in their Saturday night. Fifteen floors up, the headquarters of Chinese smartphone maker Xiaomi Corp. is all business. Beneath piercing fluorescent lights, employees with bright orange badges shuffle in and out of turnstiles, the weekend irrelevant. Hunched over a black wooden table in his modestly sized office, Chief Executive Officer Lei Jun preps for his 12th meeting of the day.

This March evening marks Lei’s first time in the office in a month. His regular trips to India on hold for the moment, he’s spent the last weeks traveling throughout China and Hong Kong, where bankers are prepping his eight-year-old startup for what’s expected to be the world’s biggest initial public offering this year. Xiaomi (pronounced she-yowmee) filed IPO paperwork in Hong Kong in early May. The company didn’t disclose how much it plans to raise, but it could go public at a value of as much as $100 billion, which would make it the largest since Alibaba Group Holding Ltd. woke the world to China’s tech ambitions in 2014. Xiaomi booked 114.6 billion yuan ($18 billion) in sales last year, a 67 percent increase from 2016, and $1.9 billion in operating profits. That’s a long way from its dire standing just a few years ago, when the onetime Chinese smartphone leader was watching its market share tank.