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Xiaomi IPO sensitive issues are all secret: how to see breaks CDR reasons?

via:全天候科技     time:2018/7/9 19:31:34     readed:292

Since the news of the Xiaomi plan IPO, the speculation, doubts and even doubts surrounding it have never stopped. What is the valuation of Xiaomi? How to treat the stock price break? Why is the CDR suspended? Why do old shareholders cash out?

As Xiaomi went public in Hong Kong, the mystery was uncovered.

1

How to see the stock price break?

At 9:30 on July 9, Xiaomi (1810.HK) was officially listed on the Hong Kong Stock Exchange with a bang.

What is embarrassing is that Xiaomi fell below the issue price at the opening price, down 2.35% to HK$16.6, and closed at HK$16.8 on the same day, lower than the previously issued issue price of HK$17/share.

For the stock price, Lei Jun has been anxious. In an interview with CCTV Finance, he said that the anxiety of the past week is that it is difficult to see if it falls, how to see people. However, he stressed that short-term stock prices are not the most important, and long-term prices are the most important. This IPO starts from a low point and is not necessarily a good thing. The most important thing is to adjust your mindset and get the company done.

In fact, as early as the week before Xiaomi’s listing, some media quoted market participants as saying that some institutional investors saw a low price of HK$15.40 in the dark trading on Thursday (July 5), which is better than Xiaomi 17 The issue price of the Hong Kong dollar was 9.4% lower. Some people also said that the price of the dark disk was HK$16.15, which was 5% lower than the issue price, but no company sold.

On July 9th, at the IPO site of Xiaomi, his CFO week was interviewed and talked about the fluctuation of subscription. He said that Hong Kong's market has not been good in the recent past. This is not just happening to Xiaomi. The situation of many stocks is disappointing. For the last Friday's dark trading broke, Zhou was capitalized that the lack of reference value in recent days of dark trading is a natural reaction of investors to the market's pessimistic expectations.

In the face of stock price breaks, Xiaomi's early investors have cheered for Xiaomi, saying that they don't care about the short-term performance of the stock price.

Mr. Xu Dalai, a member of Xiaomi’s board of directors and founding partner and CEO of Shunwei Capital, visited the Xiaomi IPO site. Xu Dalai also responded to the media about Xiaomi’s break. He said that the market's ups and downs are very normal, and for the moment, the current overall market situation is not optimistic, A-shares, US stocks, Hong Kong stocks, the overall market is not very good. Xu Dalai emphasized that for Xiaomi, listing is only a milestone and the starting point of the new Long March. We should not be disturbed by short-term stock price and market value. This is not important.

Xiaomi's early investor and GGV management partner Tong Shihao said on the scene that all-weather technology, Xiaomi's ecological construction is doing very well, and the internationalization speed exceeds investors' expectations, and it is already the first place in India. For investors, today's price is not important. I am very optimistic about the future development of Xiaomi, especially in overseas markets.

2

The offer is cold?

Xiaomi held a global press conference on June 23 and officially launched a global IPO on June 25. During that time, the sound of Xiaomi’s offer was cold.

According to the latest statistics of the Hong Kong Economic Times, on the third day of the Xiaomi Global IPO (June 27), 14 brokers accumulatively lend a total of 9.7 billion Hong Kong dollars to Xiaomi Hong Kong IPO. According to Xiaomi’s public fund raising of HK$2.4 billion in Hong Kong, it is equivalent to over-subscription of 3.06 times, and the market generally expects to oversubscribe 5 to 10 times and freeze capital of approximately HK$24 billion.

The European and American markets outside Hong Kong stocks are the “heavy towns” of Xiaomi IPO's global offering. At noon on June 25, Xiaomi held a luncheon for the global sale of investors at the Four Seasons Hotel in Manhattan, New York. The Xiaomi American Roadshow team led by Lei Jun emphasized to investors that Xiaomi is the positioning of “new species”. According to the on-site media reports, the entire road show, investors have more wait-and-see mood.

On the morning of July 6, Xiaomi announced the results of the IPO public placement. The net proceeds from the Global Offering are estimated to be approximately HK$23.975 billion, based on the announcement of the Offer Price of HK$17 per share, after deducting the underwriting fees and commissions and the estimated expenses incurred by the Company in connection with the Global Offering.

Among them, the Hong Kong region received a total of 1.035 billion valid subscription applications, with an oversubscription of approximately 9.5 times (the initial number of subscriptions was 109 million shares). The international portion was also slightly over-subscribed, with a final offer of 2.398 billion shares and an over-subscription of 1.1 times (assuming no over-allotment option was exercised and based on the initial publicDevelopmentOption granted by the pre-employment employee share option scheme).

The subscription situation of Xiaomi is much more chilly than that of the 650 times of the safe doctors of last year and the 620 times of the over-raised by the reading group.

For the subscription of Xiaomi, Lei Jun expressed his gratitude to investors, including Li Ka-shing, Ma Yun, Ma Huateng and other individual investors in his July 9 listing speech. He said that it is the time when the global capital market is changing. Although the general trend is not good, good companies will still stand out.

3

Why is the CDR suspended?

From the IPO public offering to the break-up of the listing today, the enthusiasm of investors is less than expected. Fangde Securities COO Zhang Xiang said that Xiaomi’s suspension of the CDR will have some impact on investor subscription.

On June 19, Xiaomi's official Weibo said that it decided to implement the listing plan in Hong Kong and China step by step, that is, after listing in Hong Kong, it will then be listed on the mainland by issuing Chinese Depositary Receipt (CDR).

To this end, Xiaomi Group will initiate an application to the China Securities Regulatory Commission to postpone the IEC meeting to review the company's CDR issuance application.

Just a few minutes later, the SFC responded by saying that it respected the choice of Xiaomi Group and decided to cancel the review of the company's issuance of the filing documents by the 88th Audit Committee of the 17th Audit Committee.

Prior to this, Xiaomi is expected to become the first company to issue CDRs in A shares. Why did you suddenly postpone the release of the CDR?

Some media reports said that the SFC originally hoped that Xiaomi would issue CDRs in Hong Kong IPO. Due to concerns about the valuation pressure of Xiaomi CDR, the CSRC wants to wait for the valuation of Hong Kong stocks to enter a reasonable range and then make a decision.

According to an intermediary close to Xiaomi's IPO, it is revealed to all-weather technology that considering the uncertainty of the domestic capital market environment, and CDR as an innovative measure, in order to ensure the rights and interests of all parties, the Xiaomi and the China Securities Regulatory Commission Achieved consensus Xiaomi CDR suspends the review, and subsequently restarts.

On the morning of July 9, Lei Jun accepted a section interviewed by CCTV Finance.videoAnswered the above questions. He said, "After two weeks of repeated communication with the China Securities Regulatory Commission, we reached an agreement and decided to suspend (the CDR). We will first go to Hong Kong stocks and wait for the Hong Kong stocks to function properly before going to the CDR. Reason: CDR is an important pilot to ensure that nothing is lost. At the same time, Shanghai Stock Exchange and CDR are not the best time."

4

Why do old shareholders cash out?

With the successful listing of Xiaomi, its early investment institution, Morningside Capital, became the biggest winner.

Lei Jun’s open letter issued yesterday (July 8) stated that the earliest VC, the first investment of 5 million US dollars, today has a return of 866 times. It is reported that here is the morning capital.

The updated prospectus shows that more than 34% of the shares issued by the Xiaomi IPO will be sold (total 745 million shares). According to the 21st Century Business Herald, Morningside Capital sold 627 million shares, accounting for 29%, and cashed in from HK$10.6 billion to HK$13.79 billion.

Some media also said that this is the result of Lei Jun’s repeated lobbying of Liu Xing, chairman of Chenxing Capital, because the old shareholders are generally optimistic about the long-term growth potential of Xiaomi after listing, and are not willing to reduce their holdings at this time.

Why is the old shareholder Morningside Capital eager to cash out? In the end, is Lei Jun lobbying or taking the initiative to cash out?

On the morning of July 9, Chen Xing, a partner of Morningside Capital, responded to the interview with Lei Di at the Xiaomi IPO site, saying that the first phase of the Morningside Capital Fund was established in 2008 for more than a decade. In terms of time, The fund should make a normal exit arrangement by the tenth anniversary. In the past 8 years, Xiaomi has not made any withdrawal arrangements. Especially in the past two years, I still insist on holding, so I made such an exit arrangement.

Right one: Chen Xing Capital Partner Liu Qin

"Our exit does not mean that we are not optimistic about the company. The thinking behind selling stocks is actually that we are very optimistic about Xiaomi for a long time." Liu Qin added: "Because we are optimistic, we only accept the lock for 12 months. We are The only one of Xiaomi’s investors has been locked in for 12 months, so we have made some changes.”

5

What is the valuation?

Since Xiaomi started the IPO, there have been N versions on the market and in the media. Some media reported that in January this year, Xiaomi’s IPO investment bank bidding meeting, Lei Jun once joked that you who gave the highest price, I will give underwriters, “You don’t offer the price, then for me, 200 billion The dollar is valued. "However, Xiaomi officially denied the valuation of 200 billion US dollars.

With the advancement of Xiaomi's IPO, the media exposure of Xiaomi's valuation has more than 100 billion US dollars, 70-80 billion US dollars, 69 billion US dollars and other versions. Previously, Xiaomi officially kept a close eye on these valuation versions. On June 21, Xiaomi determined the list of cornerstone investors and determined the IPR range of HK$17-22, which corresponds to an IPO valuation range of $55 billion to $70 billion.

At the Hong Kong investor meeting on June 21, Lei Jun repeatedly mentioned the fifth round of financing of $45 billion at the end of 2014. He pointed out that the reason why investors gave such a valuation three and a half years ago is because they are seeing the development of Xiaomi in the next 10 years and 20 years, because Xiaomi is unique. "The price of this $55 billion is that I don't want to ask for a price. You can just open it. It's not worth even $55 billion?" Lei Jun said.

However, at this meeting, Lei Jun once said, "Millet is a rare and versatile company in the world. The valuation should beTencentTake the valuation of Apple. This statement has caused a lot of controversy in the outside world. Some people think that Lei Jun does not hesitate to "free up" for the sake of valuation.

On July 8, Lei Jun once again mentioned the valuation of Xiaomi in an open letter to all members. He said in the letter, "The Xiaomi IPO issuance price of 17 Hong Kong dollars, valued at 54.3 billion US dollars, has become one of the top three IPOs in the history of global technology stocks."

However, according to the calculation of the Institute of Wisdom, if the employee option confirmation is not considered, the valuation of Xiaomi is about 48.9 billion US dollars according to the issue price of HK$17. This valuation has shrunk from the previously announced $55-70 billion valuation range. Wu Xiaobo, a well-known media person, also said in an article that Xiaomi’s actual IPO valuation is $48.473 billion; this valuation is only $3.4 billion higher than the 2014 valuation of $45 billion.

In an interview with CCTV Finance on July 9th, Lei Jun said that “Millet valuation should be Apple multiplied by Tencent” is a joke, expressing confidence in itself. "About Xiaomi's various valuations are all the media's high hopes for Xiaomi, and strive to have the opportunity to reach the legendary valuation." Lei Jun said that long-term holding of Xiaomi, there will be money to earn.

As of July 9th, the total market value of Xiaomi was 375.919 billion Hong Kong dollars, and the price-earnings ratio was about 34 times. Although the listing is broken, the price-earnings ratio of Xiaomi is still not low in the current environment. After all, Apple, Tencent, and Ali currently have price-to-earnings ratios of only 18, 37, and 48, respectively.

Source | All Weather Technology

Author | Zhang Chao Edit | Peace of Mind

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