The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Katrina Hamlin

HONG KONG, Jan 21 (Reuters Breakingviews) - There is no simple route to valuing China's Xiaomi 1810.HK. The company, best known for its smartphones and internet-connected rice cookers, air purifiers and other gadgets, began selling electric cars last year. That helped power its market capitalisation to a record high of $117 billion earlier this month. But a look under the hood suggests valuing Xiaomi's different parts can get messy.

Take its bread-and-butter smartphones and internet-of-things business, which accounts for the bulk of Xiaomi's top and bottom lines. The company also boasts a small but lucrative online division, comprised of mainly advertising and mobile games distribution. Together, those units are on track to generate 38 billion yuan ($5.2 billion) of net profit in 2026, analysts at JPMorgan reckon.

Trouble is, there are not that many comparable businesses spanning consumer electronics and internet services. Apple AAPL.O may be the closest peer: using the iPhone-maker's forecast 2026 earnings multiple of roughly 28 times, Xiaomi's core business may be worth nearly $150 billion. Yet that doesn't account for lacklustre growth in its home market or risks of another regulatory crackdown on the tech sector – factors that dragged down Xiaomi's stock price prior to the EV hype. Using the average multiple of domestic internet giants Tencent 0700.HK and Alibaba 9988.HK instead, the business is worth closer to $50 billion.

Ascribing value to the fast-growing autos division is even less straight-forward. Analysts polled by Visible Alpha expect the company's EV shipments to top a whopping one million units by 2030, from around 130,000 last year, as Xiaomi's sleek Porsche lookalikes win over legions of fans, including Ford Motor F.N boss Jim Farley. They have also cranked out high gross margins from relatively low volumes, though future profitability is still unclear. On a multiple of 2 times forecast 2026 revenue, the average for a group of Chinese electric-car stars and Tesla TSLA.O, the unit clocks in at just $31 billion today; that could rise to $50 billion if investors believe it will hit analyst targets at the end of this decade.

Meanwhile, the road ahead looks even more hazardous for founder Lei Jun. Xiaomi may have effectively navigated U.S-China tech wars and geopolitical tensions so far, but there are troubling signs that Washington is set to target a wider range of Chinese companies. Earlier this month, Tencent was unexpectedly blacklisted by the U.S. Department of Defense, which accuses it and more than a hundred others of having links with the Chinese military. Xiaomi's own chipmaking ambitions could make it vulnerable to extra scrutiny from Washington.

Xiaomi may be on track to deliver on its EV promises, justifying the stock rally. But valuing the company's prospects will get trickier from here.

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Xiaomi’s Hong Kong-listed shares have rallied 163% over the past 12 months, closing at HK$34.70 each on Jan. 20. The benchmark Hang Seng has risen 30% over the same period.

(Editing by Robyn Mak and Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on HAMLIN/katrina.hamlin@thomsonreuters.com; Reuters Messaging: katrina.hamlin.thomsonreuters.com@reuters.net))