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Hao gambling millet billion-dollar valuation. Investors are waiting for a high price to wait for "solutions"

via:CnBeta     time:2018/7/11 7:01:55     readed:312

However, for high-net-worth investors who subscribe to Xiaomi stock through the Xiaomi Technology Overseas Investor Channel Fund, it is still unknown when it is unpacked.

Earlier this year, many investors used this product to value Xiaomi stock (equivalent to HK$26.52/share) in the primary market with a valuation of US$79 billion. Compared with the current secondary market share price, this investment still has a loss of about 30%.

“It’s not about our 3% subscription fee and 2% annual management fee, and the future profit sharing. The current investment loss is about 35%.” One participant participated in the investment of Xiaomi Technology’s overseas investor channel fund products. Zhao Cheng (pseudonym), a high-net-worth investor, told 21st Century Business Herald that he had communicated with the fund management party (GP) in view of the large floating losses. The feedback was that “the fundamentals of Xiaomi’s rapid growth have not changed, once the CDR territory With the issuance, its valuation will be significantly rebounded, and investors will be expected to withdraw from the profit.

"Because Xiaomi has just listed, the corresponding stocks have not been released, we can only wait and see." Zhao Cheng said frankly that some of the investors also used the high-tech hot stocks in the United States to break the hair and create new heights after the listing. Yourself. For example, since 2016, the US high-tech Internet hotspots, including Facebook and Snap, have seen a break-and-restart-high-growth trend after listing. Therefore, they hope that Xiaomi's share price will follow suit and turn them into profit.

In the eyes of many Hong Kong financial institutions, it is not necessarily easy for Xiaomi to copy the stock prices of companies such as Facebook and Snap. On the one hand, many global investment institutions still regard Xiaomi as a technology consumer goods company rather than an Internet company, which may result in a significant increase in valuation in the short term. On the other hand, the recent escalation of global trade conflicts has caused Hong Kong stocks to turmoil, directly affecting the confidence of European and American investment institutions to increase their position in Hong Kong stocks, and also affecting the liquidity premium of Xiaomi stocks.

"Perhaps, only waiting for the CDR issue is the time for these investors to turn around. But when the CDR restarts, no one knows." A Hong Kong stock hedge fund manager told reporters.

$79 billion valuation of shares in stocks suffered a floating loss

Earlier this year, an accidental opportunity allowed Zhao Cheng to contact Xiaomi Technology's overseas investor channel fund products.

“At first glance, the investment terms of this product are relatively harsh,” he revealed.

First, although the terms of this product stipulate that Xiaomi is valued at US$56 billion, due to fierce market competition, fund management will soon raise its valuation to US$79 billion (ie, to subscribe for Xiaomi stock in the primary market at a valuation of US$79 billion). );

Secondly, the investor's purchase cost is not low, and it is required to pay 3% of the subscription fee and 2% of the annual management fee;

Third, the fund management team (GP) also issued higher profit-sharing conditions - in addition to 20% of investment income, they also specifically proposed that if the exit period is less than 2 years and the average annual return of investors exceeds 50 %, GP side will add 5% profit share; if the exit period is less than 18 months and the average annual return of investors exceeds 50%, GP will add 10% profit share; if the exit period is less than 12 months and investors The average annual return rate exceeds 50%, and the GP side adds 15% profit share.

"However, at the time, Xiaomi Technology's conservative valuation exceeded 100 billion US dollars, many investors still feel profitable and subscribed." Zhao Cheng said that he almost could not buy a share at that time, but fortunately through the relationship of friends to subscribe successfully.

However, with the release of Xiaomi CDR and Hong KongDevelopmentWhen the sale part was cold, he realized that Xiaomi had not yet listed, but he suffered a small loss.

"This fund management team is also helpless. They originally thought that Xiaomi's conservative valuation could break through 100 billion US dollars. One important reason is that CDR issuance will attract a large number of domestic investors to compete for subscription, which will greatly increase the valuation of Xiaomi. The Hong Kong capital market accepted the high valuation of Xiaomi, which made Xiaomi's domestic and overseas listed valuations easily break through the 100 billion dollar mark. However, with the slowdown of CDR issuance, Xiaomi lost important valuation opportunities and global trade conflicts. The upgrade led to the recent correction of Hong Kong stocks, which eventually led to the cold sale of Xiaomi to retail investors in Hong Kong. The corresponding valuation on the day of listing was only $49 billion," he recalls.

However, the fund management team has repeatedly stressed that the fundamentals of Xiaomi's rapid growth in performance have not changed. The undervaluation of the valuation will soon be significantly improved, especially after the CDR is restarted.

"Now I can only wait and see what has changed." Zhao Cheng said frankly that after all, the current level of loss is still within his risk tolerance, but he is more concerned about how long it takes for Xiaomi to wait to achieve "value return."

"Especially on the evening of the 9th, Xiaomi founder Lei Jun said that the investors who bought the Xiaomi stock on the first day of the IPO will earn a double return, we especially want to know this answer." He said with emotion.

Millet valuation dispute

Many reporters in the 21st Century Business Herald learned that there are still some differences in the Hong Kong capital market around the valuation of Xiaomi.

The above-mentioned Hong Kong stock hedge fund manager revealed that although Xiaomi founder Lei Jun believes that Xiaomi has about 200 million MIUI monthly users, he can realize the money through hardware sales without relying on hardware sales, but many overseas investment institutions still regard Xiaomi as a technology consumer goods. Company (hardware production and sales enterprise).

After all, Xiaomi Internet Service is mainly concentrated in three major areas, namely, advertising revenue based on mobile APP and smart TV traffic, revenue from revenue from online games, paid content subscription, online live broadcast, internet finance, etc. . However, many investment institutions have found through their financial reports that the contribution of the above three Internet service revenues to Xiaomi's revenue has not exceeded 10% in the past three years, and even dropped by 1% last year.

"This has led some international investment institutions not to participate in the subscription of Xiaomi International Placing, which indirectly lowered the valuation of Xiaomi." The aforementioned hedge fund manager analyzed. Before the IPO, Xiaomi's international placement part eventually sold 2.398 billion shares, oversubscribed by 1.1 times, which is a slight oversubscription in the industry's view.

Correspondingly, although Xiaomi has created 9 billionaires and thousands of multi-millionaires (two of them founder Lei Jun and Li Wanqiang added about $15.5 billion and $1.6 billion respectively), Xiaomi D After the round, the shareholding of PE institutions is not profitable.

According to the data, in 2014, Xiaomi completed the $1.1 billion E-round financing led by DST. At that time, the company's valuation was 45 billion US dollars. According to the current millet market value of 54 billion US dollars, the cumulative return of its position for 4 years is about 20%, and the annualized return is less than 5%.

"To achieve an ideal return on investment, these PE organizations can only hope that Xiaomi will show the charm of its Internet service company through the layout of smart home appliances as soon as possible." Zhao Cheng said frankly.

However, on July 10, Xiaomi's share price rose by 13%, which gave him some confidence. In his view, even if the CDR is restarted, there will be room for improvement in the short-term valuation of Xiaomi.

The reason is that from July 23, Xiaomi Group will become the Hong Kong Hang Seng Composite Index (Hang Seng Integrated Industry Index - Information Technology Industry, Hang Seng Composite Large-Cap Index, Hang Seng Integrated Large and Medium-Cap Index), Hang Seng Global Composite Index, Hang Seng Internet The constituents of the technology industry index have triggered a lot of index funds to passively follow up and increase the position, and mainland investors participate in investment through the Hong Kong stock exchange, which may bring new upside.

In the view of the above-mentioned Hong Kong stock hedge fund managers, whether these expectations can be fulfilled depends on Xiaomi's sustained rapid growth fundamentals and business development imagination space, whether it can attract institutional investors and mainland retail investors to follow suit; on the other hand, Closely related to the overall volatility of Hong Kong stocks in the near future, once the trade conflict escalates and the European and American stock markets are lowered, global investment institutions will withdraw funds from Hong Kong stocks and return to Europe and the United States to make up for the loss of portfolio portfolios. As a result, large-scale blue chip stocks in Hong Kong are generally subject to downward pressure on valuation.

"Maybe they have to withdraw from the profit, but they have to wait until the moment the CDR restarts." The fund manager personally thinks.

related articles:

FTSE Index: After the market closes on July 13, Xiaomi will be included in its index series.

Xiaomi's share price rose 13% on the second day of listing. Lei Jun: These two days are like a dream.

Xiaomi's listing "W" after the Xiaomi Group means? Different rights

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