Xiaomi opened talks with investment banks regarding a potential IPO in Hong Kong in 2018 during which it would seek a $50 billion valuation, Bloomberg reported.

A successful IPO could help the company raise at least $5 billion to fuel expansion, the news outlet said.

The China-based smartphone maker was once the most valuable startup in the world, but recently faced stiff competition from domestic rivals Huawei and Oppo.

Xiaomi ramped efforts in India, in particular, and in November was urged to invest in Reliance Jio after announcing plans to pump $1 billion into the country over the next five years.

While founder Lei Jun (pictured) did not comment on the IPO while attending the World Internet Conference in China earlier this week, he noted the company is keen to “transplant China’s business ideas into other countries.” He referred to the company’s progress in India as miraculous: “After only three years, we’ve become number one.”

Xiaomi is focusing on markets including Russia and Indonesia and is also bolstering efforts in the US, where it previously sold only fitness bands, as part of a broader goal to ship 100 million smartphones globally in 2018. Its target for 2017 is 90 million.

The smartphone vendor would be the biggest technology company to go public since Alibaba Group raised $25 billion in a US IPO in 2014, which valued the company at $231.4 billion.

Concerns
Banks are worried about the company’s ability to hit the $50 billion level, although Bloomberg quoted Keith Pogson, senior partner for Financial Services, Asia Pacific, at EY as saying the valuation is not “preposterous”. He noted the “market is hot for tech companies, especially tech companies with China ties.”

In his Radio Free Mobile blog, analyst Richard Windsor noted while growth is clearly back at Xiaomi, “the comparisons to the torrid time it had in 2016 are really easy as after Q2 2018, growth is likely to slow substantially as the comparisons to the previous year will become much more challenging.”

“Consequently, sometime in H1 2018 is the perfect time to achieve the best possible IPO price as growth will then be at its highest.”

However, he warned “lack of profitability will keep it from going public until it is capable of putting up much bigger profit numbers.”