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Millet valuation foam: real bottlenecks and illusory crown

via:博客园     time:2018/3/6 14:50:01     readed:280


Wen / Akira Junji

Around the beginning of this year, Xiaomi revealed

No doubt, so many of these, the name of the adjustment of the valuation, to build the market potential, the composition of public relations routines are most.

The question has come to me, and what I want to know is: how much is this company worth? How do we scientifically give a approximate valuation? Combined with the study and thinking of the last year, I have as much as possible to restore my understanding of millet valuation.

Before we do today's valuation, we think about these three similar valuations.

1. how to price a catty of vegetables, fish, chicken, pork and beef, respectively?

2. if you want to buy a commercial house, how do you decide how much money you would like to buy for this commercial room?

3. if a restaurant is opened across the school, as an investor, are you willing to give the restaurant a lot of valuations and share it in partnership? How is the valuation process done?

One, how do we usually price the necessities of life?

In view of the first problem, people have their own life experience. In the daily life, people know the general value range of food. In general, we would think that the vegetables "fish" pork "beef". Because of the value of a scale in the heart, we rarely have a time to be deceived, and buying things are based on their own experience of life. In addition, there is also a feature, all kinds of food, you go to the market or the supermarket to see that the price will change every day. Therefore, the short-term demand supply will affect the price.

In the first question, you can see that most things have an intrinsic value, that is, you have a natural scale for them.

To be accurate, you will not buy a catty of Chinese cabbage at the price of pork, and you won't buy a catty of pork with the price of beef.

If you find the price of fish, lower than the Chinese cabbage, you will buy some. The value scale, naturally triggers your next behavior: buy or not buy.

But we observed that the price of food fluctuates every day, which comes from short-term demand supply, people's mood swings and so on.

If you are a dog walker, then the dog is the price, and you are the value. When the dog ran in front of you (price), rope (market rules) will make it up the dog, walk with you. Similarly, when the dog is behind you, it is similar. Most of the time, dogs (prices) are not in sync with you.

Through the first example, I want to express that the intrinsic value of millet is not a definite number, just like Schrodinger's cat. It really exists, you can feel it, and it is fluctuating.

In addition, I would like to stress that there is a natural link in the mind of the public about vegetables and meat, because of the constant contact of life.

But we must be able to determine that the millet will not be higher than the Ali Tencent, nor will it be lower than the Meizu hammer. This is just as if the price of the fish is not higher than the price of beef, nor is it lower than the price of Chinese cabbage.

Two. How do we price a commodity house?

Look at second more questions. I believe that most people buy a house, not to calculate the absolute value of the house (from the cost of land, land taxes, building materials, labor costs, marketing costs, accounting) but more to refer to the same area housing prices, of course, will consider whether the school district, convenient transportation, near the mall the shopping convenience, apartment layout, orientation, property, developers etc.. This has caused us second questions: how to carry on the relative valuation method.

Under normal circumstances, our valuation is to look at the price of the same area, the similar lot, the same batch of house, especially the recent transaction price. The reference factors include whether the school district, the apartment, the orientation, the property and so on.

One factor, of course, is your analysis of the big macro environment, the market boom, and so on. These are variable factors.

In this process, you give the valuation of a suite in a similar way. Now, when we return to the example of millet, we will obviously have similar valuations, such as Apple Corp, GREE, Mei and Lenovo.

Therefore, if you use the Internet valuation method to estimate millet, it's like that when the house price is appraising in Tongzhou area of Beijing, it is very inappropriate to compare the housing price of Beijing second ring. Even if this suite is three hundred meters away from the gate of the city of Tongzhou and from the subway, it has a great error in this way. It is more appropriate for millet to be valued as an electrical manufacturing industry or a commodity retail industry. Even if it is not suitable, it is only the comparison between the East Second Ring of Beijing and the second ring of the West.

This ring is a measure unit of a benchmarking scale, which is wrong.

Third, dissect millet

The third problem is, if it's related to valuing a restaurant (enterprise), that's a question of absolute valuation. You need to know the income and cost of the restaurant in the recent year and every quarter, and then know the amount of money earned every quarter.

Since I was a student of finance, I used to evaluate this type of problems in terms of idealized models. Like this, for example.


This is the income estimate of the general financial or brokerage investment bank. In general, the general income forecast is not downward. But if you turn over the actual income or profit of the enterprise in the last few years, I will laugh. The gap between the ideal and the reality is too big and very funny.

Think of the past, I do the same thing, for example, it grew 40% this year, next year, 40%, and the year after the next.

Of course, I don't think so. Now my valuation way of thinking, take the restaurant at the school gate for example, the basic process is like this:

1) the school is in the city of several lines. What is the average consumption level of the students, and how much is the consumption expenditure per month in the restaurant?

This is to understand the development stage of the industry, the development level and prospects of the industry.

For example, the domestic computer industry and PC Internet industry in 2000 and the mobile Internet and smart phone industry in 2010 or so. The different stages of the computer industry and the smartphone industry ten years ago correspond to different industry prospects.

In the outbreak of the industry, it will attract a lot of gold miners. For example, familiar with the intelligent mobile phone industry, not listed early participants and international manufacturers, was only there, Huaqiang North millet, Meizu, Lenovo, HUAWEI, ZTE, TCL, Haier, OPPO, vivo, a hammer, a plus, cool, LETV, 360 and so on; but at this stage, the domestic left HUAWEI, millet and OPPO, vivo of the three. The smartphone industry's dividend period has gone, so the analysis will be different.

The degree of demand and the degree of competition will directly affect the changes in the income and profit of the enterprise. (at the entrance of the Wudaokou Finance Institute in Beijing, the dining room is very different from the entrance of the school entrance of the three line city.

2) how many restaurants are there in the street at the gate of the school?

This is in the analysis of competition industry competition pattern.

As the above analysis that, when the industry participants are everywhere, the blowout outbreak, some people make money, some people have to take advantage of staking, fishing, some want to build a career. The intensity of competition has a direct impact on the income.

For example, at the school gate, the two restaurants and twenty restaurants at the gate of the school are very different in business.

3) who is the specific target customer of this restaurant? Or what kind of restaurant is it located?

This is to analyze the position of the company and analyze whether it is in accordance with the characteristics of consumption.

For example, at the entrance of the school, open business restaurant is obviously not in line with the big trend. This is similar to the domestic new retail, it is not to go to the amanongo kind of new retail unmanned store, technology is not mature, social culture has not reached the level of related. At the school gate, it may be more appropriate to open the position of the student.

The more obvious case is around 2005, the grand Chen Tianqiao to do

Millet early is the smart phone, positioning is a second line city Diao wire white-collar users. But when from the second line to the three or four line, still use the original set, of course, but OV. The first and second line logistics distribution and information transfer are compared to the 345 line cities, which are more efficient and more developed. Therefore, in the 17 year, the millet online must carry on the channel change, carry out the low cost strategy to the three or four line.

In his theory of strategic and organizational structure, Chandler emphasizes the theory that strategy tends to lead organizations and organizational change lags behind. Because Xiaomi's strategy and distribution channels in the organization have lost match, Xiaomi in 2015

4) on this street, how many restaurants are there for the same location?

This is a clear subdivision and strategic choice.

Millet early positioning is a second line city of Diao silk enthusiast, the implementation of the low cost strategy, the choice of channels is online channels. Now millet is still choosing a low - cost strategy.

HUAWEI's early choice is also a low-cost strategy. The channel of choice is carrier's bundling channel, which is also a natural extension of the core competitive advantage that started from communication operators. At the present stage, the high end, the R & D route, the middle and low grade are taken into consideration, and the glory of the new brand is developed. Because HUAWEI has twenty years of technology accumulation in the communications industry, it is very reasonable to take the route of research and development from low cost routes. Have some experience in R & D technology accumulation.

If you walk on the road of millet development difference, as without straw of the cleverest, no precipitation technology, even said that the culture are not so hard. So it chose to diversify and change the circulation channel of commodity, that is, millet ecological chain products and new retail.

That is to say, millet mobile phone industry through late low cost manufacturing strategy, the first category expansion, live, the latter may have the cash cows, then research the difference. Like HUAWEI, it has always supported the cash flow of the hegemony of the communications industry, helping the mobile phone industry to carry out large-scale research and development.

Therefore, the mobile phone industry of millet is more likely to be low cost manufacturing in the later period, and the most important thing is the change of channel. That is, millet does not represent advanced productivity, and it is more likely to be an advanced production relationship (low cost, channel change).

Taking PC as an example, I think millet is DELL in the new era. The strength of marketing is not the improvement of product quality, but the reduction of cost and the reduction of circulation channels.

Production relations are more efficient, leading the competitors of the same era, having low distribution costs, wide distribution channels, and the Internet also has huge traffic volume, which is incomparable to traditional manufacturers.

It is like a battlefield, or when the traditional swim soldiers scattered Yong, a motley crew, millet has formed a military organization, disciplined. Millet is a natural high. But millet weapons (Research and development products, etc.) do not lead. The hot weapon is different from the firearms. When HUAWEI, OV and so on learned the network channel organization and advanced production relations (troops compiling), millet naturally has no advantage in the competition. And apple, with advanced weapons (better products) and excellent organizations (distribution channels), has always been a huge advantage, so it can't threaten apples.

OV, on the other hand, has adopted a centralized differentiation line from the beginning. On the one hand, the product orientation is differentiated, women, music, photography, and so on; on the other hand, the channels are also differentiated, taking the 345 line of cities as the mainstay. In addition, in the area of marketing, Is also the earliest large-scale advertising manufacturers, this and earlier years, Duan Yongping to do the overlord learning machine, step high repeaters marketing culture, is in line with the same line.

From the military point of view, OV in military strategy, is victory millet chip. Although it is said that in the army organization (online marketing channel) is backward, but learning very fast, staffing, the formation of troops, this thing to learn. So OV also survived.

On the other hand, companies similar to Xiaomi's low-cost strategy in the early period: Letv, Cool faction, Hammer, Meizu 360, etc., dead, maimed, wounded. Among them, Hammer and 360 have recently spread rumors of a merger. This is no surprise. Neither are their channels (military organizations) first, nor are their tactics (Letv's killing 800 of his enemies has lost 1,000 of its own weight, and its weapons are even more common. It would not have been surprising if it had been merged.

Under the low cost strategy, millet is alive at the moment.

5) what is the unique competitive advantage of this restaurant? Or when other restaurant owners imitate it, what is the moat in the restaurant to prevent other people from invading?

This is the analysis of the core competitiveness of the enterprise and the moat.

The current millet, in a way, is similar to what it was a decade ago.

Objectively speaking, what kind of chips, memory, cameras, screens, processors and special materials should be developed in the short term is not very realistic, which is different from HUAWEI.

Therefore, if millet wants to develop well, in the past five years, while accumulating R & D and technology, the most important place for input and output is to expand channel strategy, transform production relations and continue to occupy the market through low-cost strategy.

On the one hand, there are two lines and lines on the line and line. In this process, the interests of the line are ensured, and the line is also profitable. At the same time, the product is also tentacle.

Convenience is the core goal of Xiaomi's new retail business. Like Coca-Cola, no matter it is in the magic store or the border village of the motherland, it costs three yuan to buy it. Millet through the new retail store strategy, let mobile phones, ecological chain products everywhere can be bought, change early only pay attention to the problems of the second line city. Xiaomi's low cost strategy has strong vitality in the vast rural areas and prefecture level cities as Xiaomi sells in four or five line cities or distributors.

On the other hand, other intelligent hardware products also match sales, improve sales revenue, change the single product structure, and have a single income.

When various channels are spread, sales continue to increase, and in turn, it will further reduce the cost of procurement and lower the purchasing price of suppliers. This positive loop feedback will continue to carry out the low cost strategy.

The Xiaomi ecological chain also follows the low cost principle of Xiaomi, such as Xiaomi bracelet, Xiaomi wire board, Xiaomi battery, Xiaomi purifier, Xiaomi balance car, Xiaomi lever box, and so on. Many intelligent hardware products are the same strategy. Harvest an industry that has not been transformed by the Internet, and then cut off all the middlemen.

This is also the most powerful place I think of millet: the first transformation of traditional intelligent hardware, and then the flow of support for a manufacturer, the final use of harvesting mode.

If DELL in the computer industry, creating a direct (remove middlemen) mode, so millet is a large scale pin (production direct sales) mode, or that is to further deepen, DELL direct model of this model in the field of super Costco model in the field of commodities is MUJI form. Only millet is in the direction of intelligent hardware, and is cooperating with low cost strategies.

At the moment, millet has successfully proved itself on line, now the main direction is the 345 line cities and far more remote areas.

Therefore, the core competitiveness of millet, at present, is the leading competitor's marketing mode and low cost strategy. With the ubiquitous distribution network, although the network is not yet fully formed, the rise of Xiaomi in India further proves the scalability of low cost strategy and online marketing.

The viability of the line is the biggest challenge for millet in the next two years.

6) what is the level of staff, cooks and lobby managers in this restaurant, especially the level of management and cooks?

This is the analysis of how management, that is to judge the level of jockey.

In 2016, the problem of millet was not just a case. Low cost strategy, especially the challenges of supply chain and channel expansion, also test similar music, cool, hammer and 360. The former two basically collapsed, and now the latter two are probably considering mergers.

The management layer, represented by the Lei Jun, was the first mobile phone manufacturer to seize the mouth of the wind and became the first mobile phone manufacturer to reverse the decline. Because management ratings are very personal and subjectivism, I believe the management of domestic mobile phone manufacturers, and everyone has their own judgement, I have been tempting to mislead you.

But in terms of specific performance, you can still see what the management is doing. This is not subjective and subjective.

In 2011, -2015's downwind may be the industry wind blowing up the pig, the first advantage and even the most lucky factor, so it can't prove anything. But in the year of -2017 in 2015, this is more dependent on how the management level of the business is going on and how to elaborate.

Therefore, relatively, as the management layer of the mobile phone industry, the millet team is the top three in the country.

7) this restaurant, with the loss of time, the change of students, will there be any business changes? Or in a few years, where do you need to be careful?

This is an analysis of the long-term threat or potential risk of an enterprise.

Back to the millet, I am more worried about four questions:

1. the channel and the realistic channel of the millet can be well integrated

What we are seeing right now is that Xiaomi is trying to open a retail store, but then, it is very likely that there will be franchisees, especially in the fourth and fifth tier cities. The expansion of channels must be given to dealers. But this also undermines the original unified online pricing strategy, and with Xiaomi's fundamental strategy

The success or failure of this piece directly determines the revenue growth of the future millet, especially the spread of the four or five line urban channels and the integration of the line and line. If the integration is not a problem, the next two years in the millet, the performance is guaranteed.

2. millet in a stock market, as far as possible to steal market share, for example, in the mainland market, take away the market share of apple, HUAWEI, OV.

If in accordance with the industrial development, the current mobile industry, similar to the PC industry ten years ago, has basically been completed and has been the stock market. In a stock market, competition is the competition that you die and die. The low cost strategy of millet may be able to grab part of HUAWEI's low-end market and steal the OV sister market, but how difficult is it? If you really take it out, what will it be? Why does a dealer sell a unit of millet to sell less than OV?

This is always a problem, business problem, the baseball player on the field, should swing the club better than me.

Will 3. millet be able to find enough smart hardware to expand

Millet can cut into such areas as bracelets, batteries, body weights, notebooks, headphones, purifiers and so on. How much can this millet expand variety and how big the market space is? Whether it is enough to change the structure of millet relying too much on a single variety, and this problem also involves millet new retail strategy. How much is SKU right? Too little, not too much.

4. How Xiaomi completes similar early associations

Let's say that, if millet is just changing marketing channels and implementing low - cost strategies, I doubt that millet will be the next Association.

Electronic products, not homogenized, standardized products, are therefore destined to be replaced by the next round of new products.

This for Xiaomi, its training is undoubtedly from

8) take a look at the restaurant, quarterly earnings, income, cost and profit. Check, whether the past restaurant's financial data is consistent with the history, and probably give a valuation.

This is probably the accounting staff's work. We should analyze the reports, check the development status of the enterprises in the past few years, analyze the possible improvement space of the enterprises, compare the ratios of the industries, and finally predict the business and estimate the value of the enterprises.

Now, what I'm seeing is that the mobile phone business is about 800.

In the absence of more detailed data, I'm not sure about the exact valuation, so I can only take a relative valuation: about 18 times Apple's price-to-earnings ratio, with a base valuation of $27 billion; But given that Xiaomi has a bit of a new era of Dell's direct-selling model, a more advanced production relationship, with the possibility of upending traditional electrical hardware, I give you a price / earnings multiple of 36 times, of which, It already includes growth potential and sustainability.

That is to say, by the end of 2017, I gave the millet a valuation of 54 billion dollars, not more than 60 billion dollars.

But after three quarters, if everything goes well with Xiaomi, keep growth above 40%, and when it comes to the market, I'm willing to give you 800.

Xiaomi wants to wear that one.

Note: because of the lack of public data, the above analysis is mostly qualitative. Most of the analysis is industry prospect, market structure, core competitiveness and moat analysis, and there is no rigorous market statistics survey. Writing this article is also a process of self learning valuation and valuation, followed by millet prospectus. Maybe I will write my own thoughts and opinions for the first time.

Akira Junji, WeChat public number: QYJEQYJE

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