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After the IPO broke, it will rise again. Xiaomi can't be overestimated in the short term. Can't be underestimated in the long run?

via:博客园     time:2018/7/10 19:31:09     readed:798


At 9:30 on July 9th, the IPO of fermented millet for many days ended with the thunder bell of Lei Jun in HKEx.

Although many companies have been observed listing on the Hong Kong Stock Exchange,

Whether it is millet, Hongkong or the media, they attach great importance to this IPO. This is the first IPO ever opened by HKEx to share the same rights. It is the third largest IPO in the past three years. Xiaomi is also the only super unicorn in the wave of intelligent hardware in China. It is also the only super giant that is completely aloof from BAT. All in all, how to emphasize the significance of millet IPO is not excessive.

Why does millet burst after it breaks?

Relative to the grand ceremony of the IPO, the stock price was flat on the first day, before the Lei Jun knocked the bell, the stock price in front of the plate had fallen by 2.35% to 16.6 Hong Kong dollars; at one time in the plate, the stock fell more than 5%. Thanks to the support of various capital, Xiaomi's stock price finally stabilized, only 1.18% down, to HK $16.8. Millet's share price did not rise, in the expectation of people, whether it was publicly raised or dark trading, millet performance compared to similar listed companies are not satisfactory.

The first day of millet break, and the large volume of the need to mobilize too much money is related, and the global capital market climate change of the environment, but more from the millet itself to find.

There are investors

In addition, millet, as a company that has been established for eight years, has received multiple round of financing, early investors have withdrawn pressure, and the reduction behavior further burden on the stock price.

However, on the second trading day, Xiaomi's share price reached a strong turn, which rose more than 9% in the intraday market, and its market value hit $53 billion.


Of course, this performance is still not in line with all expectations. VC, which invested in the last round before listing, did not make any money. After raising money at the end of 2014, Xiaomi was valued at $45 billion. Now, market value is $53 billion, and it is only just beating inflation. However, Xiaomi has not made any money in the past few years, either in terms of the size or size of its business. Are a lot bigger, market value does not reflect the response. At a previous investor communication meeting, Lei Jun said:

After the first day of trading, Lei was confident about Xiaomi's future, saying firmly in his speech:

The outside world, especially the capital market, has different understanding of the mode of millet, which is the reason why millet shares break down and go up again.

There are many people who do not understand the millet mode. After the listing of millet, many bad reviews followed. But there are quite a few investors to understand the millet model. Li Jiacheng, chairman of the director of the Alibaba group, chairman of the Tencent Inc holding board and chief executive officer, Ma Huateng, all subscribe to the millet stock in personal identity. The amount of money varies from tens of millions to billions of dollars, although these actions have some support. The meaning of friends, but also with the value of millet company has a direct relationship, because for the big guy, capital investment is a kind of endorsement, if the company has problems, they will not take money.

Millet will have a long-term multi - space game, investors will use gold silver to make a statement, and my view is: from the performance, millet stock price can not be overestimated in the short term; from the business point of view, the market value of millet can not be underestimated for a long time.

Why do you say that?

Xiaomi's core competence

Lei Jun said that millet is equal to the apple * Tencent, because millet is an all-around company with an e-commerce, hardware and Internet service, which is rare in the world. However, in my view, this is not the core competitiveness of millet.

On the one hand , Apple and other companies have the attributes of the hardware of the Internet , Apple ' s Internet business revenue is higher than Xiaomi , and Apple Store ' s flat effect is higher than Xiaomi ' s home .On the other hand , the three modes of Xiaomi ' s Ironman can be copied , and the ecological chain company can copy , Huawei , OPPO , vivo and other companies with the support of Xiaomi . Huawei , OPPO , vivo and other companies watch Xiaomi learn , do electrical business , do Internet , Xiaomi has MIUI , Huawei has EMUI , OPPO , vivo has customized system and similar internet revenue collection mode .

That is to say, the so-called

The first is the supply chain.

The focus of the controversy over Xiaomi at the start of the business was

The second is the ecological chain.

The ecological chain is based on Xiaomi's user ecology. Xiaomi has 300 million users, many of which are more loyal rice noodles, many companies have no real fans, Xiaomi is there. Through MiUI and various Appies, Xiaomi has established continuous contact with users, loading them with more products and services, on the one hand, relying on the continuous stream of services to make money, to ensure that the hardware profit margin does not exceed 5%, continue to have a cost-effective advantage; On the other hand, we can expand the category. In theory, the millet boundary in the consumer market is infinite, and it can even be extended to life department stores, food, drinks and so on.


A few days ago, I saw that Xiaomi has even produced products such as sea cucumbers that are not scientific and technological hardware. Using Xiaomi methodology to make sea cucumber products, whether it is the main 8-hour bubble hair technology or the simple and scientific packaging, is very.

Millet ecological chain is a unique model. Through this model, millet reproduces its methodology in a semi open way, sharing users, traffic and even technology with the ecological chain partners, while avoiding what they are doing. Millet has previously stressed that owning hundreds of fast-growing Ecos Corporation shares is a neglected value.

The third is new retail.

Millet is different from a few years ago: no longer only through the Internet selling goods, but to push millet home, take the new retail model of online and offline, let the line under the line of efficiency and cost performance. In 2017, millet revealed that in the next three years to open 2000 millet home in the world, which is not Only selling mobile phones, but at the same time selling millet ecological chain category, SKU currently only about 100, Ping effect is second only to apple, users can go to the store experience, purchase and access to services.


Ecological chain, supply chain and new retail are trinity: the accumulation in the supply chain allows Xiaomi to have high-quality products with high performance and price ratio, expand the category constantly, while maintaining quality control, and then use new retail to achieve efficient sales.

Xiaomi three axes, ensure Xiaomi

The three growth potential of millet being underestimated

On the eve of the IPO, Lei Jun said in his letter that Xiaomi has unlimited room for growth. The first is that smartphones can continue to grow into the world's top three, and the second is to expand into more and more multi-billion-level markets. The third is the international market space is broad, the future international business income will account for more than half of the income.

In fact, in my view, the growth potential of millet is more than that. The space is limited, and Lei Jun's speech is not finished.

First, IoT.

Smart phones enter the stock market, millet to enter the top three of the world means to share the market, the most potential of the smart phone is the IoT is the Internet of things market, because the connection between people and people is the connection between people and things, things and things, and the key application of commercial 5G is also IoT. The data show that the number of devices in the Internet of things in 2020 will reach 50 billion, ten times the number of smart phones, which can also be divided into smart cars, smart home, intelligent medical care and other segments of the market, the whole is a trillions of markets.


Lei Jun made a speech, all kinds of open letters did not mention this too much, but Xiaomi's prospectus shows that Xiaomi has built the world's largest consumption-level IoT Internet of things platform. Connected to more than 100 million smart devices, excluding mobile phones and laptops, Xiaomi CFO's weekly funding also told the media at the IPO ceremony.

Because the IoT market is still on the eve of the outbreak, it has not created a large income for millet, this part of the value is now undervalued or even ignored, but this represents the future, like the AI to Google / Baidu, the new retail of Ali. In the visible future, based on Millet ecological chain, supply chain and new retail capacity, millet can continue to maintain the leading edge in the Internet of things, and achieve business value.

Second, C2B.

C2B is Customer to Business, that is, personalized customization, which grasped the trend of consumption upgrading in the current consumption classification. In a simple way, people want better in the wave of consumer upgrading, but different people have different definitions, Ali, Jingdong, and more are doing things for different groups. The user has a better consumer experience, and the C2B model is becoming more and more important, that is, to build / purchase / integrate the specific quality, characteristics and prices of goods and services for specific user groups.

Xiaomi to do C2B has a unique advantage. On the one hand, it has a lot of data, the more millet products it uses, the longer it serves, the more it contributes data, and the more it understands their needs, the more refined its operations are; on the other hand, it has ecological chains and supply chain capabilities. Different products can be customized for different groups. We see a wide variety of goods in the Xiaomi ecological chain, such as luggage (90%), signature pen, rice cooker and even sea cucumber (a good ginseng), which are all C2B custom-made for specific groups. Custom in the millet ecology, more and more refined, more and more rich categories. It is because there is demand before customization that Xiaomi can further ensure the quality of the supply chain and reduce inventory

Third, the boundary.

Lei Jun says Xiaomi

Most companies have boundaries, only a few super giants like Ali, Samsung are weak, they do everything, and they do very well.

It's not just a technology company, but a lifestyle company that provides all the possible products and services to users. It copies the success of the millet phone to TV, replicates to smart rings, sockets and so on, and even replicates to the food field, and as the Lei army says, millet is developing category expansion. When doing everything on the surface, it is actually planned and rhythmic. There are three levels:

The first core is the mobile phone, which is the top priority of millet. MIUI is the first entrance to access and connect users. The Lei Jun first emphasizes millet to achieve the three front of the global mobile phone and the mobile phone.

The second extension is IoT, which is based on smart phone development, including smart home, smart home appliances, smart cars, audio and video entertainment, intelligent health and so on. Many categories, such as smart TV millet, have been leading. In the future, every popular network equipment is in the range of millet potential. It is because this is my opening. Xiaomi is the only giant company that runs out of intelligent hardware in China.

The third extension is the consumption upgrade, this is a very large concept, the Chinese want better, better goods, better entertainment, better service, more education, better medical treatment. In theory, these are the potential opportunities for the future of millet, millet can be the core competitiveness of its three plate axe, iron. The three models and methodologies of human beings are applied to these fields.

Some people may not think so, but Xiaomi is proving it and is emerging in many areas

We will

As we can see, consumption upgrading is the biggest frontier for Xiaomi in the future. What Xiaomi wants to do is not an ordinary department store, but a new department store based on the transformation of the Xiaomi model to meet the needs of consumption upgrading. This is another profound implication of Lei Jun's statement that he is going to enter more and more multi-billion-level markets.

What is the biggest challenge for millet?

As Huawei Terminal CEO Yu Chengdong said in his circle of friends:

What is the biggest challenge for millet? I think there are two points:

1, in terms of income structure, it is not easy to transform from hardware to Internet.

Millet claims itself as a company with hardware, Internet and e-commerce properties. From the business level, millet does provide a variety of Internet services based on MIUI, but in terms of income structure, millet is still low in revenue from the Internet. In 2017, Xiaomi accounted for 8.63% of revenue from the Internet, up 51.2% from the same period last year. We can see that Internet revenues account for a small proportion in the revenue of Xiaomi.

If millet wants to increase Internet revenues, it will be difficult to achieve mass revenue through advertising and other modes, and will affect the user experience. It is difficult for millet to take compulsory measures like apple AppStore, because the control of Applied Ecology is limited.

Therefore, millet must enter the hinterland of Ali, Tencent and so on. Millet said that he is an e-commerce company, but the main sales of its own products and ecological chain products, not like Ali, Jingdong to explore the same category, the lack of logistics and financial infrastructure, if millet to strengthen the new retail capacity, it needs to be in the logistics, financial and other infrastructure to carry out a comprehensive layout; in the entertainment business small At present, there is no real progress in rice. It can not be satisfied with investing in Iqiyi such as Iqiyi, but in the pan entertainment IP.

2, in terms of input structure, R & D investment of millet is seriously insufficient.

Millet is a technology company without boundary, since it is so, technology is always the most basic ability, but millet is currently in the core technology investment is not enough, especially compared to HUAWEI, Baidu and other peers.

The prospectus showed that the R & D expenditure of millet from 2015 to 2017 was 1 billion 511 million yuan, 2 billion 104 million yuan and 3 billion 151 million yuan, respectively, accounting for 2.26%, 3.07% and 2.75% of the revenue. Although the increase in 2017 was 49.8%, the proportion was not high. Robin Li has revealed that Baidu invested billions of dollars in R & D every year, with a total of 15% in total income; in 2017, HUAWEI's investment in R & D was 89 billion 700 million yuan, and revenue accounted for 14.86%. Both were far higher than millet; even in the household appliances industry, millet R & D investment was not high, such as the 2017 in the United States. This proportion is 3.5% in the year.

The lack of R & D input means the lack of innovative technical foundation. OPPO and vivo issued the annual flagship Find X and Nex this year, breaking the homemade homemade and lack of innovation in domestic mobile phones, which have been widely praised in the market. The troubles encountered in this year also show that the underlying technology is the foundation of the scientific and technological enterprise. These phenomena are enough to let millet wake up. To strengthen product innovation, we must first strengthen the low level technology input.

However, if millet does not have enough profit, it will be difficult to increase investment in R & D.

Finally, no matter how the stock price performance, Xiaomi IPO is a miracle of China's new economic growth. It's not just broken.

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