After 8 years of struggle, Xiaomi is finally going to market.
On the morning of May 3, Xiaomi officially submitted its listing application to the Hong Kong Stock Exchange.
According to the prospectus, Xiaomi's revenue from 2015 to 2017 was 66.811 billion yuan, 68.434 billion yuan and 114.625 billion yuan respectively, a year-on-year increase of 67.5% in 2017; operating profit was 1.373 billion yuan, 3.785 billion yuan and 12.215 billion yuan, A year-on-year increase of 222.7% in 2017;
Among them, the revenue of smartphones in 2015 was 53.715 billion yuan, accounting for 80.4%; the revenue of IOT and consumer goods was 8.69 billion yuan, accounting for 13%; the revenue of Internet services was 3.239 billion yuan, accounting for 4.9%. By 2016, smartphone revenue was 48.764 billion yuan, accounting for 71.3%; IoT and consumer goods revenue was 12.415 billion yuan, accounting for 18.1%; Internet service revenue was 6.538 billion yuan, accounting for 9.6%. In 2017, smartphone revenue was 80.564 billion yuan, accounting for 70.3%; IoT and consumer goods revenue was 23.448 billion yuan, accounting for 20.5%; Internet service revenue was 9.896 billion yuan, accounting for 8.6%.
In terms of net profit, Xiaomi lost 7.627 billion yuan in 2015, made a profit of 490 million yuan in 2016, and lost another 43.89 billion yuan in 2017. According to non-IFRS, in 2015, Xiaomi's adjusted loss was RMB 300 million; in 2016, Xiaomi's adjusted profit was RMB 1.9 billion; in 2017, Xiaomi's adjusted profit was RMB 5.4 billion.
Released together with the prospectus, there is also an open letter from Lei Jun.
1. Is Xiaomi an innovation-driven Internet company?
Lei Jun once again mentioned in the open letter that he will always insist that the comprehensive net profit rate of hardware should not exceed 5%. Lei Jun once again said: "Moving people's hearts, kind price" is not an empty phrase, these eight words are our values and spiritual creed. Here, I would like to
There are existing and potential user commitments: From 2018, the comprehensive net profit margin of Xiaomi's overall hardware business will not exceed 5%. If there is any excess, we will give back to the user.
Brother Xi pointed out in a previous article that Lei Jun's statement of 5% of the comprehensive net profit is a packaged talk. At present, Lei Jun's words are very useful. When we understand that 5% is a very high level of net profit, Lei Jun has already added a point to Xiaomi's IPO.
Lei Jun also said in the open letter: Xiaomi is not a pure hardware company, but an innovation-driven Internet company. Specifically, Xiaomi is an Internet company with mobile phones, smart hardware and IoT platforms as its core.
Although Lei Jun deliberately emphasized that Xiaomi is an Internet company in the open letter, he did not cite Xiaomi as the main business of the Internet company and its profit model on the Internet. Regarding this paragraph, Brother Xi thinks that Lei Jun is a little too deliberate.
There are many Internet companies in China. Baidu's main application is search engine, Tencent's main application is social networking, Ali's main application is e-commerce, what is Xiaomi's Internet application? To be honest, Xiaomi still needs to continue to work hard on the Internet.
On the contrary, the data that Xiaomi's mobile phone revenue accounted for more than 80% shows that Xiaomi itself is a hardware company.
The reason why Lei Jun emphasizes that Xiaomi is an Internet company is the same as the previous saying that the net profit of hardware does not exceed 5%. The purpose is also to increase the valuation of Xiaomi's IPO and create momentum for the upcoming IPO. Brother Xi can understand Lei Jun. After all, the market's valuation of hardware companies is much lower than the market's valuation of Internet companies.
2. Now is the best time for Xiaomi’s IPO
On the matter of Xiaomi's listing, Lei Jun's previous attitude has been swaying. For example, in March 2016, Lei Jun stated in an interview that Xiaomi I will not be listed within 5 years. Also at another event in 2016, Lei Jun also hinted that Xiaomi won't go public until 2025.
In just 2 years, why did Lei Jun's attitude take a big turn? In fact, this is not to blame Lei Jun, because 2016 was a low period for Xiaomi. As Lei Jun said in the open letter: In 2016, our market share declined. We are soberly aware that there are still many foundations behind the rapid development in the past few years, so we take the initiative to slow down and make up lessons. Lei Jun said that Xiaomi has experienced a decline, which means that Xiaomi's mobile phone shipments fell by more than 30% in 2016, and then it was badly criticized. Under such circumstances, Lei Jun said that it is understandable to go public within 5 years. After all, no one wants to sell themselves cheaply during the market downturn.
Looking at Xiaomi's current market environment, the annual sales have exceeded 100 billion, the mobile phone market share ranks fourth in China, and the market share in India is the first... Compared with the low tide in 2016, Xiaomi has made a beautiful performance. 's turnaround. In addition, Xiaomi's IPO may be the first new stock since the Hong Kong Stock Exchange's "same share with different rights" policy took effect. All of the above provide a good foundation for Xiaomi's IPO.
Once this opportunity is missed, the uncertainty of 5G and the competition in the Indian market will present unpredictable risks to Xiaomi. Moreover, Lei Jun is deploying AI, Internet of Things, blockchain and other fields, and in the next bigger game, these also need more funds to support.
Therefore, whether it is the policy or the current development situation, now is the best time for Xiaomi to IPO.
3. Can Xiaomi’s IPO help Lei Jun win a 1 billion gambling contract?
Xiaomi's IPO also reminded Brother Xi of the 1 billion gambling game between Lei Jun and Dong Mingzhu.
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 beat Gree within 5 years, he hoped Dong Mingzhu would pay himself 1 yuan, and Dong Mingzhu responded aggressively at the scene. :
"Don't mention 1 yuan, if you want to bet, bet 1 billion."
Regarding this gambling game, Dong Mingzhu responded again in an interview with the media in March. She said, "His numbers cannot be confirmed. He is not a listed company, and he can't see it. If he is listed, he may be willing to cash it. After the listing, it is not about the market value, but about your sales. I am dying of laughter."
Looking at it now, if Xiaomi succeeds in IPO, there is no such thing as Dong Mingzhu said that it is not a listed company. By then, both parties may be able to deliver on their promises. But at present, even if Xiaomi can successfully IPO, it may not be realistic to want to surpass Gree in revenue. On April 25, Gree Electric announced its 2017 financial report: Gree Electric’s revenue in 2017 was 148.2 billion yuan and its net profit was 22.4 billion yuan. The difference in turnover is 33.5 billion. Dong Mingzhu said that Gree's goal this year is 200 billion yuan. Can Xiaomi achieve this data? It's unlikely now. After all, the overall mobile phone market is not good this year, which is very detrimental to Xiaomi's revenue growth.
But in the long run, Brother Xi believes that Xiaomi's ecological layout is worth looking forward to.
There are still a few months before December 2018. Who do you think Dong Mingzhu and Lei Jun can win this bet?