Lei Dinet Lei Jianping reported on June 5th
Xiaomi's listing has entered a key process. Hong Kong media said that Xiaomi will conduct a listing hearing on Thursday (July 7). The fastest month-end IPO will raise funds of US$7 billion (approximately HK$54.6 billion) and is scheduled to be listed in early July.
According to another source, Xiaomi IPO plans to sell US$3 billion in the form of CDRs in the Mainland, accounting for 30% of the total IPO fund-raising; the rest will be sold in Hong Kong. This means that Xiaomi can raise $10 billion from the capital market.
According to a recent statement, the list of underwriting groups currently circulating in Central Hong Kong can be described as extremely luxurious; it includes three international banks and six Chinese banks.
Among them, 6 Chinese investment banks are CICC and BOC International, Agricultural Bank of China International, CCB International, ICBC International and CMB International; 3 international investment banks are Credit Suisse, Deutsche Bank, and JP Morgan Chase.
In fact, Xiaomi not only grows in itself, but also forms an ecological chain of millet. Today, Xiaomi Heshun has invested in a total of 100 millet ecological chain companies, and millet bracelet manufacturer Hua Mi is listed in the United States as a member of the Xiaomi ecological chain.
Lei Jun’s ideal is to be a great company
In the past few years, Xiaomi has successively invested in iQIYI, Midea, OFO Xiao Huangche, building block boxes, and 51 credit cards. Many products on the millet platform, such as millet bracelets, millet purifiers, and millet headphones, are also produced by millet eco-chain companies.
A list of Xiaomi and Shunwei's investment companies
Xiaomi's layout concept in the investment field is:
1. Establish a bond with member companies in a way that shares are not controlled, and control the percentage of shares held by member companies between 10% and 20%.
The purpose of doing so is to maintain the independence and momentum of the development of member companies, rationalize the interest relationship between member companies and Xiaomi, and ensure the consistency of interests. The third is to enjoy the return on investment of member companies after they become bigger.
2, the transmission of values, product concepts, and methodologies is fundamental to the proliferation of the entire ecosystem.
Xiaomi does not make quick money, do the best products, pursue high cost-effective, and firmly believe that the Internet model is advanced, improve efficiency, transform traditional industries into values, export to ecological chain companies, and enhance cohesion.
For example, starting from mobile phones, to smart hardware to consumer consumables, its design side maintains a simple style, removes unnecessary decorations, and the function side only retains core functions;
Through multiple closed betas, strict quality testing is required before listing, and the rate of repair and complaints after listing is low. In addition, a low margin policy is adopted to lower the threshold for consumers to try. High-quality, low-priced products can be quickly launched in the early stages of listing.
3, output brand endorsement resources, increase product market attention
For start-ups, it is a long process to gain market recognition for self-owned brands. However, if they are labeled with millet, they can quickly increase their attention and shorten the period of market cultivation.
Specifically, the millet brand is open to products related to science and technology and geeks through millet's closed beta, and is open to products based on smart homes, consumer hardware, and consumer consumables. Brand.
4. Give channel resources support, high conversion rate of online channels and rapid laying of offline channels, speed up the laying and speed up the amount of start-up products.
On April 25 this year, Xiaomi CEO Lei Jun disclosed the resolution adopted by Xiaomi’s board of directors on April 23 at the millet launch conference held by Wuhan University:
Xiaomi promises its users that the overall consolidated net income of the hardware business (including mobile phones, IoT and consumer products) will not exceed 5% per annum. If more than Xiaomi will return more than 5% of its profits to Xiaomi users in a reasonable manner.
At the press conference, Lei Jun took the initiative to propose: Some people questioned how such a low profit rate can guarantee the continued competitiveness of Xiaomi.
Lei Jun's reply is that generally world-class innovations are not generated by windfall profits. Companies such as Google were initially made up of several people using their intelligence.
"It has been proved that Xiaomi has made products that are far beyond consumers' expectations by insisting on innovative technology and top-notch design." ”
Lei Jun’s ideal is to be a great company. Of course, Xiaomi’s commitment to the annual overall hardware business (including mobile phones and IoT and consumer products) with a consolidated after-tax net profit rate of no more than 5% has been controversial.
The controversial point is that Lei Jun announced this news at the new product launch of Xiaomi Mobile. In the mobile phone industry, only Apple and other very few companies can achieve a consolidated net profit after tax of more than 5%.
If you exclude the Xiaomi mobile phone, the comprehensive post-tax net interest rates for millet-like wristbands, millet air purifiers, millet power supplies, and millet lifestyle consumer products can indeed exceed 5%.
If this standard is implemented, the price of these products will have a great impact. In Lei Jun's words, mass consumer goods should take the initiative to control reasonable profits. This will be an irresistible trend of the times. Any attempt to cope with high gross margins will move toward a path of no return.
Millet's investment also has a logic. According to informed sources, Lei Di network revealed that millet's core product is the millet phone, around the phone, millet has three product circle:
The first circle is the mobile phone peripheral products, based on Xiaomi mobile phone has achieved market influence and a large number of active user groups, millet is surrounded by millet has the inherent advantages of the first circle, such as headphones, speakers, mobile power.
The second lap is smart hardware. Xiaomi invests in intelligent hardware products in various fields, such as intelligent air-purifiers, water purifiers, and rice cookers. It also invests in incubating drones, balance cars, and robots. Other smart toys such as geeks.
From 2014 to 2016, Xiaomi successively invested 27/28/22 smart hardware products, equivalent to investing in a company for 15 days, laying the foundation for the future layout of the Internet of Things.
The third circle is life supplies such as towels, toothbrushes, suitcases, running shoes and backpacks.
On the one hand, it conforms to the trend of consumption upgrade, satisfies the pursuit of high-quality life for rice flour, and on the other hand, the attributes of technology companies determine the product life cycle is uncertain, and the life consumables products can have a huge hedging effect on the uncertain properties of technology companies.
Millet mobile phone as the core, these surrounding ecological chain products enhance the viscous millet ecological, making millet more and more strong.
Morningside Capital is Xiaomi IPO Big Winner
In the first four years of its founding, Xiaomi had an average round of financing each year. They were:
At the end of 2010, Xiaomi completed A-round financing of US$41 million. The investors are Morningside, Qiming and IDG, with a valuation of approximately US$250 million;
In December 2011, Xiaomi completed a financing of US$90 million with a valuation of US$1 billion. The investors include Qiming, IDG, Shunwei Fund, Temasek, Qualcomm and Morningside.
At the end of June 2012, Xiaomi raised US$216 million and valued US$4 billion.
In August 2013, Xiaomi completed a new round of financing with a valuation of US$10 billion.
In December 2014, Xiaomi completed US$1.1 billion in financing, and investors included investment institutions such as All-stars, DST, GIC, Hopu Investment, and Yunfeng Fund.
The prospectus shows that Xiaomi CEO Lei Jun holds 31.1296% of the shares and is a major shareholder; Morningside Capital holds 17.193% of the equity, which is the second largest shareholder. Jimmy Lin, the president of millet, holds 13.3286% of the shares and is the third largest shareholder.
In addition, Sunning Capital holds approximately 2.91% equity, Xiaomi co-founder and senior vice president Li Wanqiang, Hong Feng and Huang Jiangji, co-founder of Xiaomi, who has just retired, each hold 3.2375% equity.
Xiaomi co-founder and deputy president Liu Dewei holds 1.5494% of equity. Xiaomi co-founder and retired Zhou Guangping holds 1.4317% of equity. Xiao Qian co-founder and Wang Xiao, head of Xiaomi TV, hold 1.1149% stake.
Currently, Xiaomi Executive Directors are Lei Jun and Lin Bin. Non-executive Directors are Shunda Capital CEO Xu Dalai and Morningside Capital Partners Liu Qin. The independent non-executive directors are Chen Dongsheng, former Kingsoft Software CFO Wang Xiaode, and a Hong Kong-based Lee Surname.
Both Shunyi Capital and Morningside Capital are important ally of Xiaomi. They have jointly invested many common projects and are similar to the era of gatherings. In particular, Shunyi Capital is an important partner of Xiaomi, and they have a lot of investment cases in Xiaomi's ecological chain.
Shun Wei Capital CEO Xu Dalai once told Lei Diwang that Xiaomi Heshun is a joint venture company that will produce a number of outstanding companies with IPO capabilities in the future.
"Millet also has a very strong investment team, and the partnership between Capital and Xiaomi's investment team should be a brother relationship." ”
For Xu Da, Xiaomi Heshun’s pursuit of capital will have different goals. Xiaomi’s pursuit of strategic investment value. The main pursuit of capital for the capital is the value of financial investment, and it is most important for LP to bring lucrative returns.