Xiaomi may be twice as expensive as Apple when it lists: Report

Morgan Stanley, which is one of the banks leading Xiaomi's initial public offering in Hong Kong, has said the company deserves to trade at a premium to its peers from around the world.

The investment bank's belief is based on the Chinese handset maker's faster growth trajectory and its gain in market share, Bloomberg reported.

According to Morgan Stanley, Xiaomi has a fair value of between $65 billion and $85 billion, which translates to a trading multiple of between 27-34 times its estimated adjusted earnings for FY19.

In comparison, Apple, which is the world's largest listed company by market capitalisation, is currently trading at 14.5 times its estimated adjusted earnings for FY19.

Bloomberg quoted CLSA as saying that Xiaomi's success stems from the fact that it provides "world-class" products at low prices and sells high-margin services.

Analysts at JPMorgan Chase reportedly wrote that the Beijing-based company could fetch as much as $92 billion, given the strong growth in its cash flows beyond 2020.

Xiaomi plans to increase the number of smartphones it ships in a year by 42 percent to 130 million units in 2018, according to CLSA. This number could rise to 179 million by the end of 2019, and 218.6 million by the end of 2020.