Xiaomi's investment company Liyuxing successfully passed the GEM IPO

According to Jiwei.com, on November 12, Shenzhen Lihexing Co., Ltd. ("Lihexing" for short) successfully passed the GEM IPO.

It is reported that since its establishment, Lihexing has focused on the research and development, production and sales of automation and intelligent equipment, and is committed to becoming a leading intelligent manufacturing solution provider in the field of new generation information and communication technology (5G). At present, as an equipment supplier, the company mainly serves customers in the fields of information and communication technology, and realizes the deep integration of high-end equipment manufacturing with new industries such as the new generation of information technology. The company's products are mainly used in the detection and manufacturing of mobile smart terminals and network infrastructure devices. The company's customers include well-known companies such as Huawei, Foxconn, Vertiv, TCL, Fuji Xerox, and Canon.

In terms of performance, during the reporting period (2017-Q1 2020), the company's main business revenue was RMB 229.9102 million, RMB 408.1821 million, RMB 578.7284 million and RMB 83.6154 million, respectively, with a three-year compound growth rate of 58.66%; the net profit was RMB 30.7402 million, RMB 42.5265 million, RMB 104.0954 million and RMB 21.2655 million, respectively, with a three-year compound growth rate of 84.02%.

It can be seen that from 2017 to 2019, Lihexing's revenue and net profit have increased rapidly. Regarding the rapid growth of its performance in the past few years, it stated: During the reporting period, the company's business developed rapidly, mainly benefiting from the market pull of downstream industries and the rapid development of the consumer business of the company's major customers. The quality requirements of downstream products continued to increase, and the demand for the company's equipment grew rapidly.

From the perspective of customer groups, it can be seen that Lihexing's performance has been rapidly improved basically through Huawei. In 2017, Huawei contributed 161 million yuan to its revenue, accounting for 69.22% of its total revenue. In 2018, it contributed 250 million yuan to its revenue, accounting for 61.38%. In 2019, its contribution further increased to 437 million yuan, accounting for an astonishing 75.47%.

According to it: In 2013, the company became a supplier of Huawei. With the development of downstream customers, the company's sales revenue from its largest customer during the reporting period was RMB 161,467,400, RMB 250,594,000, RMB 436,862,300 and RMB 39,726,000, accounting for 69.22%, 61.38%, 75.47% and 47.49% of its operating income, respectively. As of May 31, 2020, Lihexing had orders on hand from Huawei exceeding RMB 217 million, which was half of Huawei's contribution to its sales last year.

Interestingly, although Lihexing's performance mainly depends on Huawei's growth, Xiaomi has already invested in Lihexing. According to the author's inquiry, Hubei Xiaomi Changjiang Industrial Investment Fund Management Co., Ltd. has invested in the company before. After this issuance, Xiaomi still holds 2.88% of the company's shares! It can be said that Xiaomi has become the beneficiary of Lihexing's listing.

Lihexing can be said to be a representative enterprise in the field of equipment. We can see that under the general background, domestic equipment and materials have achieved very good results in the past few years. The author recently summarized the enterprises invested by Xiaomi, which are basically centered around materials and equipment, as well as some chip manufacturers in mobile phones. These enterprises, with the support of domestic mobile phone brands, will become the main force of mobile phone concept stocks listed in the future. The factors behind this are, on the one hand, due to the general background of the industry, and on the other hand, it is undoubtedly that the enterprises focus on research and development and seize this wave of opportunities.