Thanks in large part to market share gains and expectations of fast growth in the future, China-based smartphone maker Xiaomi Corp. could trade at a valuation that is double that of Apple Inc. (AAPL).

That’s according to Morgan Stanley, which said in a research report covered by Bloomberg that Xiaomi has a fair value of between $65 billion and $85 billion which is about 27 times to 34 times adjusted earnings forecasts for 2019. In comparison, Apple trades at about 14.5 times adjusted earnings estimates for next year, based on data compiled by Bloomberg.

But it's not just Apple that Xiaomi could beat in terms of valuation. Morgan Stanley, one of the investment banks handling Xiaomi's Hong Kong initial public offering, noted it should have a richer valuation than Fitbit Inc. (FIT), GoPro Inc. (GPRO), Alibaba Group Holding (AABA) and Baidu Inc. (BIDU). Meanwhile J.P. Morgan analysts predicted in a separate report that Xiaomi could be worth as much as $92 billion thanks in large part to strong long-term cash flow growth. (See more: Amazon Rivals Catching Up In Smart Speaker Battle.)

Xiaomi Gaining Share At The Expense Of Rivals

At a time when the smartphone market is increasingly saturated and competition is fierce, Xiaomi has been able to stand out from its rivals because of its ability to churn out high-end smartphones but price them lower than rivals. For the first quarter Xiaomi was able to push Apple out of the fourth place spot in terms of shipments to the Chinese market and was the only one of the top vendors to see gains during the first three months of the year. According to market research firm Canalys Research, Xiaomi saw shipments increase 37% to 12 million units in its home country. In March the company rolled out its Mi MIX 2S smartphone that rivals the iPhone X at a fraction of the cost. The phone is equipped with the latest hardware, including Qualcomm Inc.'s (QCOM) new Snapdragon 845 processor, the same that is found in Samsung's Galaxy S9 and S9+. The Mi MIX 2S costs $527 in China, compared to the iPhone X, which retails at $1,355 there.  (See more: Xiaomi Unveils iPhone X Rival at Half the Cost.)

Xiaomi The Gateway To Millions of Users

Goldman Sachs, which is one of the Xiaomi IPO sponsors wrote in its own report that the company is the gateway to around 100 million users in China who are using its online services. As a result, Goldman thinks Xiaomi could be valued at between $70 billion and $86 billion or 26 to 32 times adjusted 2019 net income expectations. “Xiaomi integrates the internet user experience with hardware to offer an unrivaled user experience,” Goldman Sachs wrote according to Bloomberg. “The company’s hardware aggregates traffic, its software builds platforms, and its internet services generate revenue and profit.”

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