China Fund News reporter Zhao Ting
The listing of Xiaomi is expected by the market as the largest listing case in the world this year. According to the latest report of Hong Kong media, Xiaomi may submit an application for listing in Hong Kong as early as May, and then issue CDR in A-shares to realize dual-share circulation.
Starting from Xiaomi’s mobile phone, Lei Jun built a "unicorn" in eight years, taking stock of its commercial map, from air conditioning and sweeping the floor., water purifiers, rice cookers, towels, toothbrushes, offline retail stores, its wide penetration range can be described as comparable to BAT.
With Xiaomi’s landing in the capital market, whether Lei Jun’s worth exceeds that of Ma Huateng and who won the 1 billion bet with Dong Mingzhu will probably be able to contract the people who eat melons for the second half of the year.
Re-transmission of Xiaomi Hong Kong stocks listed on the mainland to issue CDRs.
Since last year, Xiaomi’s listing process has been frequently concerned by the market. There are many speculations about when and where to go public, but there is no official response.
Today, another Hong Kong media reported that Xiaomi is ready to submit an application for listing in Hong Kong in early May at the earliest, and then issue CDR in A-share (China depositary receipt) to realize dual-share circulation. According to reports, Xiaomi is expected to become a listed company with different rights in the same share.
Let’s first look at what is a listed company with different rights in the same share.
In a company with the same share but different rights, also known as dual ownership structure and AB share structure, the management tries to control the whole company with a small amount of capital and divide the company’s shares into high and low voting rights.
In 2014, it was precisely because of the restriction of the same shares and rights of the Hong Kong Stock Exchange that Alibaba finally missed the Hong Kong market and turned to the US for listing. In order to attract new economic companies, the Hong Kong Stock Exchange revised the Listing Rules. According to the current disclosure process, the second round of consultation summary is expected to be published in late April. After that, the revised Listing Rules came into effect and the Hong Kong Stock Exchange began to accept officially submitted listing applications.
Let’s see how to issue CDRs in A shares. At present, the list of the first batch of CDR companies has been released, and eight companies, including BAT, Ctrip, Sina Weibo and Netease, have begun to contact the domestic A-share market. However, at present, there are still technical problems in CDR that have not been solved, and the landing rules have not yet been issued. In the eyes of the industry, the dual-share circulation of Xiaomi may not be realized so soon.
Commercial map of "Mijia"
Maybe some people still have questions. Isn’t Xiaomi a mobile phone company? Can you also send CDR to A shares as a "unicorn"?
Fund Jun will take care of Xiaomi’s business map and look at Xiaomi’s family background.
At first glance, I was shocked. In addition to mobile phones, the layout of Xiaomi has penetrated into almost every field of life, such as air conditioners, water purifiers, sweeping robots, rice cookers, balance cars, and even towels and toothbrushes …
Fund Jun will take a look at the commercial map of "Mijia".
1. Mobile phone sales ranked fourth in China.
In July 2011, Xiaomi announced its entry into the mobile phone market. In August 2011, Xiaomi’s mobile phone was officially released. At present, smartphones are still the main business of Xiaomi. According to the sales data in 2017, Xiaomi’s mobile phone shipments reached 55.1 million units, accounting for 12.4% of the domestic mobile phone market, ranking fourth. From the perspective of global shipments, it has exceeded 90 million units, ranking fifth in the world.
2017 is actually the year of counterattack of Xiaomi mobile phone. The data shows that in 2015, Xiaomi once won the domestic market sales champion. In 2016, Xiaomi’s sales slipped by 36% year-on-year, and only 41.5 million mobile phones were sold.
It is estimated that many people still remember the "Are youok" divine comedy brainwashed by Lei Jun, which came from the English speech given by Lei Jun at the press conference in India in 2017. Divine Comedy is not sung in vain. At present, India is already the largest overseas market for Xiaomi. In 2017, Xiaomi occupied more than 20% of the Indian smartphone market, ranking second.
2. More than 90 enterprises under the Xiaomi ecological chain
According to the analysis of investors, Xiaomi’s most valuable business at present lies in its all-round ecological chain layout, covering a wide range comparable to Tencent and Ali.
On March 29th, 2016, Xiaomi strategically upgraded the ecological chain, and launched a brand-new brand-MIJIA, named "Mijia" in Chinese, which is dedicated to carrying Xiaomi’s own products and ecological chain products.
First intuitively feel the products on the Xiaomi ecological chain:
Fund Jun integrated、After the research report made incomplete statistics, Xiaomi Eco-chain has 90 hardware startups, of which about 30 have released products.
Do you feel how you have everything after reading it? The seemingly messy layout is actually the product ecological expansion along the three layers of "mobile phone periphery-intelligent hardware-lifestyle". The concept of "Xiaomi = high price" is implanted into consumers’ minds and continuously strengthened, so that the eco-chain product company that Xiaomi invested and incubated can grow rapidly with the help of Xiaomi platform.
3. Offline store-Xiaomi Home
New retail is also an important business segment of Xiaomi. These include Xiaomi’s home and quality life.
As of January 2018, there were 300 millet homes nationwide, involving products of Xiaomi, such as mobile phones, smart homes, smart wear, digital accessories and daily necessities, and the average annual sales per square meter reached 280,000-290,000 yuan. Compared with Apple stores, its floor effect is 400,000 yuan.
It is said that Xiaomi Home aims to open 1,000 stores in three years, and may eventually open 1,000-2,000 stores nationwide, with sales expected to exceed 10 billion US dollars.
In addition to Xiaomi Home, it is reported that Xiaomi’s boutique e-commerce platform will soon open a physical store in Shanghai. The quality store is named "Quality Life", which will be the second physical store format of Xiaomi after "Xiaomi Home". The predecessor of Youpin is Mijia Youpin, which is the second Xiaomi e-commerce platform outside Xiaomi Mall, focusing on the concept of selected e-commerce, and the target is Netease YEATION, a subsidiary of Netease.
4. It breeds four unicorns.
Xiaomi is not only a unicorn, but also has four unicorn enterprises in its eco-chain enterprises. They are Zhimi Technology, Nainbo and Zimi Technology with a valuation of more than 1 billion US dollars, and Huami Technology, which was listed in the United States on February 8, 2018. In addition, the parent company of Qingmi Technology, Power Future, was also listed on the New Third Board in August 2016.
Xiaomi’s valuation becomes a mystery
Looking at the commercial map, do you feel that Xiaomi is really a big family business? What is the valuation of Xiaomi? There is a big gap in the current guess data, ranging from $68 billion to $200 billion.
What was widely circulated before was the Xiaomi Pre-IPO financing promotion materials that were exposed in March this year. This material shows that. Xiaomi’s current valuation is 68 billion US dollars. If it goes public in the fourth quarter of 2018, its market value will be in the range of 85.4-135.1 billion US dollars.
For the above financing materials, Xiaomi said that it would not comment.
According to the latest Hong Kong media reports, there has been a lot of stock selling activities of Xiaomi’s shareholders before listing in recent months, and the selling price shows that the company’s valuation ranges from 65 billion to 70 billion US dollars.
In addition, there are reports that some investment bankers said that the valuation of $100 billion would not be crazy data. It is also reported that Lei Jun set a target of $200 billion for Xiaomi and was recognized by investment banks.
If it is really a market value of $200 billion, how do you understand it?
On the afternoon of April 16th, the data showed that the total market value of JD.COM was $56.8 billion, and that of Alibaba was $435.2 billion. Simply calculate, it is equivalent to half Ali, 3.5 JD.COM and 2/5 Tencent.
In any case, market participants generally believe that Xiaomi will become the largest listing case in the world this year.
Whether Lei Jun became the richest man in China this year with Xiaomi’s listing has also been talked about by the outside world. On February 28, 2018, Hurun released the global rich list, and Lei Jun ranked 80 th, worth 100 billion. China’s highest ranking in the list is Ma Huateng, 15th, worth 295 billion.
The bet with Miss Dong is about to be cashed.
If Xiaomi goes public this year, a gambling game that people who eat melons have been watching for five years is about to arrive at the lottery time.
Let’s review what this gambling game is about. In December 2013, at the CCTV "China Economic Person of the Year" award ceremony, Lei Jun, the winner of the annual person award, said that if Xiaomi’s operating income beats Gree within five years, he hoped that Dong Mingzhu would lose himself 1 yuan. Dong Mingzhu responded strongly at the scene: "Don’t mention 1 yuan, if you want to gamble, you will gamble 1 billion yuan."
Xiaomi in 2013 is estimated to be still losing money.
At this year’s two sessions, Dong Mingzhu was once again asked about the gambling contract. Her reply was that Xiaomi was not a listed company, and the data could not be confirmed. After listing, sales could be seen. When interviewed by Shanghai Stock Exchange, Dong Mingzhu replied indifferently, "I’m sure to win".
In 2018, five years have arrived, Xiaomi may really go public, and the gambling will be announced soon.
Previously, Xiaomi’s revenue did not have a clear data source. In November 2017, Lei Jun publicly stated that he had completed the sales target of 100 billion yuan. Gree’s annual report will not be published until the end of April. From the first three quarters of last year, Gree’s total revenue has exceeded 112 billion yuan.
So, it’s really a suspense who wins or loses.