On the early morning of June 11, the official website of the China Securities Regulatory Commission announced the CDR prospectus of Xiaomi Group (hereinafter referred to as Xiaomi). According to the CDR prospectus, Xiaomi’s operating income was RMB 66,811 million, RMB 68,434 million, RMB 114,625 and RMB 34,412 in the first quarter of 2015, 2016, 2017 and 2018; Xiaomi’s ownership after deducting non-recurring profit and loss The net profits of the common shareholders of the parent company were negative 2.248 billion yuan, 233 million yuan, 3.945 billion yuan, and 1.038 billion yuan, respectively.
The prospectus also disclosed that Xiaomi’s financial-related business has now been reorganized to Xiaomi Finance, which is a wholly-owned subsidiary of Xiaomi Group. However, based on future business development plans, the Group intends to use equity incentives to gradually separate Xiaomi Finance as an independent entity. The proposed equity incentive plan will grant Xiaomi Financial Options to Lei Jun, Xiaomi Finance Management and its core employees. The incentive plan has been approved by the board of directors and approved by all shareholders.
Due to the restructuring of millet finance, Xiaomi Group provided millet financial restructuring loans of approximately US$830 million and RMB299 million respectively to Xiaomi Finance Group. By operating the millet financial options plan, the company expects that Xiaomi Finance will no longer be the controlling subsidiary of Xiaomi Group.
In order to standardize the transactions between the future of millet finance and the Xiaomi Group and safeguard the interests of investors, Xiaomi Group and Xiaomi Finance have signed a framework agreement to stipulate the transaction limits for the next three years (2018-2020). In accordance with the agreement, in the next three years, Xiaomi Group provides financial services for Xiaomi Finance (including loans and other credit and guarantee services, settlement services, acceptance notes, entrusted loans, trust loans, letters of credit, asset-backed securities and financing, Financial and financing advice, but not including Xiaomi Group's one-time restructured loan for Xiaomi Finance's reorganization, amounted to RMB 12.770 billion, RMB 14.950 billion, and RMB 14.45 billion, respectively. In addition, Xiaomi Group and Xiaomi Finance also set a maximum transaction limit for marketing services, comprehensive support services, and payment and settlement services.
In the first quarter of 2018, Xiaomi Finance's income and pre-tax net profit accounted for 0.90% and 0.22% of Xiaomi Group respectively. As of March 31, 2018, Xiaomi Finance's total assets accounted for 13.55% of the Xiaomi Group.
Xiaomi began involvement in internet finance business in 2015. During the reporting period, the company's internet finance business covered supply chain financing business, internet micro loan business, payment business, wealth management product distribution business, and internet insurance services.