Pricier than Apple? Xiaomi is again so hot that investors might get burnt

Some fear pursuing a sky-high valuation for a planned blockbuster IPO would be a mistake

Back in 2014, smartphone-maker Xiaomi Corp. became that rarest of unicorns, the most valuable startup in the world, with a $46 billion valuation.

Xiaomi applied a seemingly potent formula for conquering the China market. Its phones had quality features and looks, like those of Apple Inc.’s iPhones, but came with low prices. Adding to the allure, they were sold only online, with flashy marketing events—sometimes featuring co-founder Lei Jun looking like Steve Jobs in a black turtleneck—to stir up interest.

Then Xiaomi’s star dimmed after it missed sales targets, released phones with glitches and endured product delays.

Instead of fading, Xiaomi made a