Chinese selfie app developer Meitu is preparing for a listing which could see it valued at $5 billion, although there is some scepticism about its potential.

According to Bloomberg, the company is looking to gauge interest from potential investors this week. But while it is looking to talk-up its app potential, the report noted that 95 per cent of its current revenue comes from selling mobile phones, with “limited proof” it can capitalise on its apps.

Meitu’s selfie touch up apps have around 446 million monthly active users worldwide, and the company is the third biggest mobile app developer in China.

The apps offer image editing features that let users adjust their heights, add make-up and alter their complexion.

It also offers a live-streaming app similar to Periscope and Meerkat.

The company was reportedly mulling an IPO earlier in the year, although there were question marks over the price, and whether it could keep up with its own pace of growth.

It now plans to use 35 per cent of the proceeds to expand its smart hardware business, while 25 per cent is earmarked for strategic investments and acquisitions. The company will also use some of the money to expand its internet services and fund research and development.

Bloomberg said the listing would be the biggest for Hong Kong for a first time share sale made by a technology company since Alibaba’s $1.7 billion offering in 2007.