Xiaomi Ups Profit Estimates for 2018 Thanks to Strong Sales

December 26, 2017
220 Views

Xiaomi has adjusted its expectations for the coming year upwards. Where earnings growth was ‘only’ 12 percent earlier, this number has now been adjusted to 18 percent. This means that the total profit forecast for 2018 amounts to 2 billion euros on a total turnover of 18 billion.

According to Reuters, generated a profit of approximately $1 billion in 2017, based on estimated net revenue of $17 billion to $18 billion. Xiaomi is hopeful that in 2018 its profit will increase to up to $2 billion.

Chinese smartphone makers are gradually conquering a growing share of the smartphone market. Last month, Huawei announced, for example, that it would want to storm the American market from next year. The first device to be released in the US is the Huawei Mate 10 and Mate 10 Pro.

Companies such as Oppo and Vivo also know how to present excellent figures time after time, although these phone makers are mainly focused on the home market. For the time being, at least.

A company that has spread its wings a long time ago is Xiaomi. They sell appliances in almost the entire world, with particular popularity in economically emerging markets, such as India.

Increasing Popularity in Emerging Markets

xiaomi-redmi-note-4

In India, they are the biggest smartphone brand along with Samsung. The most popular device of the Chinese is the Xiaomi Redmi Note 4 : an extremely affordable phone that offers everything you would expect from a smartphone in 2017. The company is also getting popular in India’s Rival country Pakistan where Mi Note 4 was the most googled smartphone this year.

The company is doing so well that it has had to adjust its expectations for the coming year. We obviously have to adjust this upwards. Representatives of the Xiaomi have told bankers that they expect to start 18 percent more profit next year. Earlier, they thought they would achieve 12 percent profit increase. For this reason, a total profit of around 2 billion euros is expected for a total turnover of 18 billion.

Possible IPO in 2018

In the corridors, we talk about a possible IPO in 2018. Analysts estimate Xiaomi’s value at around 100 billion euros. Less than a year and a half ago, according to these analysts, the company was ‘only’ worth 50 billion euros. Thanks to strong sales in 2017, the estimated value has almost doubled.

Earlier, the director of Xiaomi, Lei Jun, already indicated that they want to grow exponentially and therefore continually attract investments. Particularly in the higher segment, one wants to gain more ground.

Xiaomi is generally known as a supplier of cheap phones but would like to get rid of this image. As a result, people are increasingly focusing on the high-end market, with devices such as the Xiaomi Mi 6 and Mi Mix. However, the common denominator remains that devices have an excellent price-quality ratio.

Whether 2018 will be the year for an initial public offering, can only tell the time.

 

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