Author: Li Jun
On October 8, affected by the weak market of Hong Kong stocks, Xiaomi Group-W (hereinafter referred to as “Millet”) closed down 4.9% to HK$13.58, which has fallen more than 20% from the issue price of HK$17; closing market value It was HK$306.6 billion and the contract was $39.1 billion.
Just three months ago, on July 10th, Xiaomi founder Lei Jun promised at the listing celebration party: “To make the investors who bought the shares of Xiaomi Company on the first day of listing doubled”. Compared with the issue price, Xiaomi has fallen more than 20%. Although the semi-annual report released after the listing is bright, Xiaomi’s share price promised by Lei Jun seems to be getting farther and farther.
The market has been controversial. Whether Xiaomi should be valued according to the standards of Internet companies or hardware companies. In addition, the peak period of smartphone growth has passed. The decline in global shipments in 2018 is an inevitable trend. One of the important markets that Xiaomi relies on, the exchange rate of emerging markets such as India has fallen sharply, which will cause damage to Xiaomi’s performance. What kind of impact?
Technology stocks listed in the tide of capital diversion
The slump in Xiaomi has caused many sellers to stun. After the listing, the stock price has been sluggish, what happened to Xiaomi?
Most of the market participants surveyed believe that, in terms of funds, the listing of technology stocks in the Hong Kong market has diverted funds, and Xiaomi has not been included in the scope of Hong Kong stocks. The lack of funds from the mainland has triggered a sharp fall in Xiaomi.
Previously, research institutions including Deutsche Bank, Macquarie Capital, Everbright Securities, Southwest Securities, etc., all seemed to believe that Lei Jun "doubled", since the listing, the research report has been given to Xiaomi & ldquo; “Buy” rating, target price ranged from HK$19.6 to HK$30.3, and the current share price is far from the forecasts of these institutions.
A Shanghai-Shenzhen-Hong Kong fund manager in South China told the First Financial Reporter that after the United States repeatedly raised interest rates, the overseas liquidity was tightened. A number of new economic and technological stocks such as the US Mission Review (03690.HK) will be launched. In the Hong Kong stock market, there is a diversion of the market where the funds are not sufficient, so that the stock prices of the Internet companies in the new economy are declining. On the other hand, the mainland funds cannot go to Hong Kong to take over Xiaomi, etc., and the same stocks have different rights. pressure.
On July 14th, the Shanghai Stock Exchange and the Shenzhen Stock Exchange jointly issued the Notice on the Relevant Arrangements for the Transfer of Hong Kong Stock Connects to the Interconnection Mechanism (hereinafter referred to as “Notice”), which have different voting rights to structure the company’s stock. For the time being, it will not be included in the stock market of Hong Kong Stock Connect under Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect.
The "Notice" means that mainland funds will temporarily be unable to invest in Xiaomi through the Hong Kong stock exchange channel. From the suspension of the issuance of CDRs to the inability to be included in the Hong Kong stocks, mainland investors have basically no ideal channel to invest in Xiaomi, a new economic enterprise.
In addition to the funding factor, Xiaomi's decline is also related to the final valuation method, although Lei Jun said that Xiaomi's business model is “unique”.
Hardware revenue growth is faster, valuation is controversial
Before and after the listing of Xiaomi, the controversy surrounding the valuation of Xiaomi has never been interrupted; from the initial price of “100 billion US dollars”, the market value has reached less than 40 billion US dollars, one of the key points is that in the end, Xiaomi should be According to the standards of Internet companies, it can achieve nearly 50 times price-earnings ratio, or according to the valuation of hardware companies like small household appliances, the price-earnings ratio is more than ten times?
Xiaomi's semi-annual report said that “IoT and consumer products” increased revenue by 104.3% from RMB 5.1 billion in the second quarter of 2017 to RMB 10.4 billion in the second quarter of 2018, mainly due to smart TVs and notebook computers. Revenue from Internet services business increased by 63.6% from RMB 2.4 billion in the second quarter of 2017 to RMB 4 billion in the second quarter of 2018, mainly due to the increase in advertising revenue. The monthly active users of MIUI exceeded 200 million in June 2018.
It can be seen that the growth rate and total volume of the company's Internet business are far less than the growth rate and scale of hardware revenue.
IDC said that in the second quarter of this year, the average selling price of the smartphone market increased by 15% year-on-year. This suggests that consumers are willing to spend more money on mobile phones that meet their needs, including not only better cameras, but also emerging categories such as games.
In the second quarter of 2018, the average selling price of Xiaomi smartphones was 952.3 yuan per unit, and in the second quarter of 2017 it was 863.8 yuan per unit. According to the company, the increase in average selling price was mainly due to the strong sales of medium and high-end models such as Xiaomi MIX 2S and Xiaomi 8 in the Chinese market. ” However, this average price increase of 10% is far less than the market average of 15%.
In this regard, a QDII fund manager in South China told the First Financial Reporter that Xiaomi's mobile phone was originally relatively low in price. The same hardware configuration level is basically the lowest price in the industry, and the profit space is very limited. The real imagination is the hardware of IoT daily necessities. Sales growth. Before and after the listing of Xiaomi, the market popularity increased greatly. After the funds were raised, there were also new investments. It is not surprising that the income growth is rapid. If the future growth rate slows down and competitors make more responses, then Xiaomi should finally adopt a growth model similar to small household appliances. Valuation.
On September 17th, Lei Jun gave a speech at the “2018 World Artificial Intelligence Conference”. Human beings have entered a new era of artificial intelligence. The breakthrough of Xiaomi's artificial intelligence is in the IoT field.
The Indian rupee has depreciated sharply. How does Xiaomi ensure market share?
Global smartphone shipments have fallen, and Xiaomi has put more focus on emerging markets such as India, where smartphones are not yet fully populated, and this faces the pressure of the Indian currency rupee depreciation and the decline in market share.
According to IDC statistics, in the second quarter of this year, global smartphone shipments were 342 million units, down 1.8% from 348.2 million units in the same period last year. In the second quarter of this year, the Indian smartphone market pattern was: Xiaomi 29.7% market share ranked first, Samsung ranked second with 23.9%, VIVO ranked second with 12.6%, OPPO accounted for 7.6%, and voice (Transsion) ) ranked fifth with 5.0%. Among them, except Samsung, the others are Chinese mobile phone manufacturers.
Although Xiaomi is still the No. 1 in the Indian market, the market share in the second quarter has fallen by 0.6 percentage points from 30.3% in the first quarter. On the other hand, from the beginning of 2018 to the present, the RMB against the rupee fell from 9.75 to 10.72. The depreciation of the Indian rupee also obviously put some pressure on Xiaomi. In addition, Xiaomi's sales market is more in emerging markets. After these market currencies have depreciated sharply this year, Xiaomi's performance growth in these markets is questionable.
Zhongtai International said that Xiaomi's overseas revenue in the first half of the year increased by 151.7% year-on-year to 16.4 billion yuan, accounting for 36.3% of total revenue. Xiaomi's cooperation with the Indian e-commerce platform Flipkart will help further strengthen its market share in India. With regard to exchange rate fluctuations, Xiaomi can hedge some foreign exchange risks through methods such as forwards and options. It is expected that the proportion of overseas income will continue to rise.
“We will have a planned and rhythmic expansion of the category, and there are many hundreds of billions of markets waiting for us to fight in the past and continue to move from victory to greater victory; the vast market in the international market is promising. In the first quarter, Xiaomi's international business accounted for 36% of total revenue. We must further promote internationalization, and realize the international business income as early as half of the total income. Only these three strategies guarantee the future growth of Xiaomi. & rdquo; Looking ahead, Lei Jun said.