Xiaomi's 2018: Strike when the time is right

Xiaomi has received good news one after another 　　since 2018. On January 6, the first Xiaomi authorized store in Vietnam opened in Ho Chi Minh City; on January 9, Xiaomi and Oculus jointly launched a VR all-in-one machine at CES 2018, and the Mi Rabbit Fingertip Building Blocks won the 2018 Tillywing Awards Most Creative Fun Award in the United States; on January 25, Counterpoint data showed that Xiaomi ranked first in the Indian market in Q4 last year. Let's learn about the relevant content with the mobile phone portable editor below.

　　On February 1, Xiaomi MIX 2 and 13 other products won the 2018 iF Design Award; on February 2, an IDC report showed that Xiaomi's mobile phone sales ranked fourth in the world in Q4 last year and fifth in the world for the whole year; on February 8, in Brand Finance's "2018 Global Top 500 Brand Value Report", Xiaomi squeezed into the ranks of the world's top 500, ranking 455; on the same evening, Xiaomi's ecological chain company Huami Technology was listed on the New York Stock Exchange in the United States...

Xiaomi's 2018: Strike when the time is right

　　Xiaomi smartphones: Return to No. 1 in China within ten quarters

　　In October 2017, Xiaomi achieved its annual revenue target of over 100 billion yuan ahead of schedule, officially entering the "100 billion club". The biggest contributor was naturally Xiaomi's mobile phone business.

Xiaomi's 2018: Strike when the time is right

　　After being underestimated in 2016, Xiaomi achieved a miraculous comeback in 2017 with its full-screen mobile phones, and its mobile phone sales soared. According to IDC data, in the fourth quarter of last year, when the global mobile phone market growth rate fell by 6.3%, Xiaomi achieved an astonishing 96.9%, ranking just behind Apple, Samsung, and Huawei. From the full-year data, Xiaomi's mobile phone sales for the whole year were 92.4 million units, still ranking fifth in the world after OPPO, which sold 111.8 million units.

　　This achievement made the nearly 20,000-strong Xiaomi team very excited. Lei Jun, the once extremely low-key CEO of Xiaomi, also began to speak out in a high-profile manner on various occasions, full of praise for Xiaomi phones, and he seemed to have changed from the image of a diligent "ascetic monk" to the state of a "loving father" who hopes his children will succeed.

Xiaomi's 2018: Strike when the time is right

　　Lei Jun is not only a "kind father", but also a "strict father". At the Xiaomi annual meeting held recently, Lei Jun once again issued orders, claiming that within 10 quarters, Xiaomi will return to the top of the Chinese mobile phone market. This reminds people of a Weibo picture posted by Xiaomi CFO Zhou Shouzi in January: "In the coming year, even sleeping is a waste of time." It seems that Xiaomi is serious about its battle against Huawei and OV in the mobile phone battle in 2018, vowing to achieve an absolute victory.

　　The real gap between Xiaomi and the “No. 1 in China”

　　Does Xiaomi have the real ability to be the "No. 1 in China"? Or is this just Lei Jun's "sudden ego"? There is a lot of discussion in the mobile phone industry. The "Mi Fans" naturally firmly support Xiaomi's ingenuity and honesty, while more doubts come from the actual gap between Xiaomi and Huawei OV.

　　Let's look at IDC's data on mobile phone shipments for the whole year of 2017. For the whole year, Xiaomi's shipments ranked fifth. Although the annual growth rate was much higher than that of other competitors and even the entire industry, the shipments of the top four competitors were about 3.4 times, 2.3 times, 1.6 times, and 1.2 times that of Xiaomi, respectively. If Xiaomi wants to top the domestic mobile phone market within ten quarters, its own shipments must at least double, after all, other competitors will not stop growing and wait for you to surpass them.

Xiaomi's 2018: Strike when the time is right

　　If we only compare shipments, Xiaomi has another way to go, which is the overseas market. Recently, DigiTimes Research, a Taiwan-based electronics industry research organization, said that Xiaomi is likely to surpass OPPO in the first quarter of this year and become the second largest smartphone manufacturer in China, second only to Huawei, with vivo and Lenovo ranking fourth and fifth respectively. This ranking is obviously based on global sales, because it points out that Xiaomi's rapid rise is mainly due to the continued expansion of markets such as Russia and Eastern Europe.

　　Xiaomi is still a long way from being the No. 1 in China, but it is not self-deprecating. In Lei Jun's view, Xiaomi led the global industry to collectively follow up on the "full screen" technology in 2017. This is not only a brilliant counterattack for Xiaomi, but also the first time that the Chinese electronics industry has taken the lead in mastering the direction of global technological evolution. "As long as we continue to provide excellent products that are innovative, outstanding in performance, superior in quality, beautifully designed, and reasonably priced, we will win lasting recognition and trust from users." Lei Jun once again emphasized the importance of the trinity of "innovation, quality, and users" at the Xiaomi Annual Meeting.

　　With the opening of MWC 2018, Xiaomi's 2018 flagship phones Xiaomi 7 and MIX3 (or MIX2s) made their debut, and Xiaomi's leading role is still shining.

　　Huami's listing: accelerating the development of the ecological chain

　　On the evening of February 8th, Beijing time, Huami Technology successfully listed on the New York Stock Exchange in the United States, becoming the first company in the Xiaomi ecosystem to be listed in the United States.

　　This time, Huami Technology's initial public offering of 10 million ADSs (American Depositary Shares) was priced at $11 per ADS, with a total financing amount of over $110 million. On the first day of listing, Huami's stock price closed at $11.25, up $0.25 from the issue price of $11, an increase of 2.27%.

　　Huami's successful listing in the United States is a huge victory for Xiaomi's ecological chain model. Today, Xiaomi's ecological chain model has invested in 100 companies, incubated more than four exclusive companies, and many companies have annual revenues exceeding 1 billion yuan, and 16 companies have annual revenues exceeding 100 million yuan.

　　Xiaomi's ecological chain model is no longer a large number of smart products, but a large network formed by the interconnection of smart products, which fully surrounds you and your family. The following are the main companies and products of Xiaomi's ecological chain. You can find out which Xiaomi ecological chain products have quietly entered your work, study and life.

Xiaomi's 2018: Strike when the time is right

　　Today, Xiaomi's ecological chain is flourishing everywhere, thanks to Xiaomi's fertile financial soil, but it also cannot hide the fatal flaw of being highly dependent on the "Xiaomi" IP. In the "risk statement" of Huami Technology's listing, this point is also deeply written: Xiaomi is its most important customer and distribution channel. The deterioration of the relationship between Huami Technology and Xiaomi or the reduction in sales of Xiaomi's wearable products may have a significant adverse impact on Huami's operating performance.

　　It is worth noting that this potential crisis is not unique to Huami Technology. All companies in the ecological chain will inevitably fall into the dust net once they lose their support from Xiaomi.

　　Capital Operation: Xiaomi is about to IPO?

　　From his previous habitual low-key attitude to his current high-profile declaration of war for the throne of "No. 1 domestic mobile phone", from his previous blunt statement that Xiaomi would not go public to Huami Technology's successful listing in the United States, Lei Jun has actually invested in 18 New Third Board companies. This series of capital behaviors has made people fantasize about Xiaomi's IPO.

　　In mid-January 2018, many online media seemingly reported the news of Xiaomi's upcoming IPO. It is reported that dozens of Chinese and foreign investment banks participated in a fierce bidding for underwriter qualifications, and Goldman Sachs, Morgan Stanley, Credit Suisse and Deutsche Bank were the first to grab entry seats. The most common argument for Xiaomi's IPO is: "Xiaomi is likely to be listed on the Hong Kong Stock Exchange in the second half of 2018, with a valuation of US$90-110 billion and a price-to-earnings ratio of 60 times."

　　Regarding the IPO rumors, the relevant person in charge of Xiaomi's brand department did not deny it, but said he would not comment on more details of the IPO.

Xiaomi's 2018: Strike when the time is right

　　The enthusiasm of capital, which was ignited at one point, slowly calmed down under Xiaomi's cold treatment. However, Huami Technology's listing in the United States has rekindled investors' hopes. According to the prospectus, founder Huang Wang holds 39.4% of the shares, making him the largest shareholder of Huami Technology; Shunwei Capital holds 20.4% of the shares, making it the second largest shareholder; People Better Limited, a fund under Xiaomi, holds 19.3% of the shares, while the company controlled by Lei Jun holds 39.7% of the shares, which is higher than Huang Wang.

　　Some industry insiders believe that Xiaomi's ecological chain companies may rush to go public before Xiaomi goes public, which will undoubtedly make Xiaomi more valuable and play a certain role in pricing.

　　Conclusion: Good things become more valuable only after many trials

　　Of course, the road to listing for all companies is not smooth, including Xiaomi. First of all, internally, due to the high-end and low-priced Xiaomi mobile phones, the rapid expansion of Xiaomi Home, and the lack of obvious software monetization benefits, Xiaomi's profit margin is low, which may directly affect its valuation.

　　In terms of external value, people have said that the 90-100 billion US dollars rumored on the Internet is too high. In horizontal comparison, JD.com's market value is 58.6 billion US dollars, Baidu's market value is 80.9 billion US dollars, and Apple's market value is 900 billion US dollars. Xiaomi's market value wants to surpass them, but judging from its current turnover, net profit and profit margin, it is not realistic and there will be a bubble. In this regard, industry insiders predict that if Xiaomi goes public at the end of 2018, a valuation of 60-80 billion US dollars is more reasonable.

　　At the same time, the IPO preparation period has always been a high incidence period for all kinds of corporate lawsuits, including Xiaomi. Just on January 26, Coolpad sued Xiaomi and others to the Shenzhen Intermediate Court on the grounds of suspected patent infringement. To be more conspiratorial, other mobile phone manufacturers, except Coolpad, are probably already preparing to file patent lawsuits against Xiaomi. Xiaomi's IPO process is bound to lead to a battle to rectify the reputation of domestic mobile phone patents.

　　In any case, Xiaomi's actions are worth our expectation and encouragement. At present, Xiaomi has already entered the 2018 "HARD" mode. Despite the numerous difficulties and challenges, good things will become more precious after a long time.

Xiaomi's 2018: Strike when the time is right

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