China Startup Eyeing $100 Billion IPO Vows to Limit Profits
- Company to restrict hardware margin to 5 percent or less
- Lei Jun envisions Xiaomi’s profit model as IPO filing nears
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Chinese smartphone maker Xiaomi Corp. is making unusual preparations for what may be the world’s biggest initial public offering this year.
The Beijing-based company, led by serial entrepreneur Lei Jun, is promising to limit the net profit margin in its hardware business "forever” to no more than 5 percent, according to an emailed statement. The policy will apply to smartphones -- its biggest revenue source -- as well as other gadgets it makes. It pledged to distribute the excess amount to its users if the margin exceeds the cap in coming years.