On June 11th, Xiaomi Group issued the CDR prospectus. The raised funds will be mainly used for global business expansion, core product R&D, and eco-chain related businesses such as IoT and consumer products. The company will apply for listing on the Hong Kong Stock Exchange. The source disclosed to the China Securities Journal reporter that the application for Xiaomi's CDR issuance has either been approved soon, or it will break the current 24-day listing history maintained by Ningde.
Many details have not been disclosed
Judging from the current situation, the key information such as the issue price, issue volume, issuance proportion, and how to convert basic stocks of Xiaomi CDR has not yet been disclosed. It is expected that the time of issuance and listing will also be pending.
According to the prospectus, the plan adopts a market-based method of inquiry, which takes into account factors such as the company's fundamentals, investor demand, market affordability, and funding needs for future development to determine the issue price.
On June 7, nine documents such as the "Registration and Management of Depositary Receipts and Transaction Measures (Trial)" were issued to remove obstacles for the issuance of CDRs. According to the regulations, the issuer and its lead underwriters scientifically designed distribution plans according to their respective circumstances. , To establish a reasonable and effective incentive and restraint mechanism for institutional investors to participate in inquiry, and to promote the active participation of professional institutional investors and prudent quotes.
Sun Jinyi, an analyst at New Era Securities, believes that with reference to the company's 'H share + ADR' issuance model, Xiaomi's CDR may be consistent with the pricing of Hong Kong stocks. It is expected that the price-earnings ratio of its CDR issuance pricing may not be based on 23 times.
The rights of holders of depositary receipts are clearly stated in the prospectus. Xiaomi stated that holders of depositary receipts can enjoy the rights of the company's Class B ordinary shareholders, including obtaining cash dividends, share dividends and other property distributions, and exercising the share options. To exercise voting rights, etc.
Promote internationalization strategy
The prospectus shows that 40% of Xiaomi’s raised funds will be used for global business expansion, 30% will be used for research and development of core autonomous products, and 30% will be used to expand and strengthen IoT and consumer products and mobile Internet services (including artificial intelligence). ) And other ecological chain related business.
According to the Hong Kong stock prospectus disclosed by Xiaomi, 30% of funds raised are used for global expansion, 30% for R&D of independent products, 30% for expansion and strengthening of IoT and consumer products and mobile Internet services, and 10% for operations. Funding and general company use.
'Global expansion' has become a key investment in millet financing. Since 2014, Xiaomi has actively promoted its internationalization strategy and achieved good results. The millet CDR prospectus shows that millet has entered 74 countries and regions in 14 countries and regions. Sales into the top five.
Xiaomi’s overseas income has increased year by year. In 2015-2017 and the first quarter of 2018, overseas income was 4.056 billion yuan, 9.155 billion yuan, 32.081 billion yuan, 12.47 billion yuan, accounting for 6.07% of the company’s total revenue, respectively. %, 27.99%, 36.24%.
Xiaomi has made remarkable achievements in tapping the Indian market. In 2017, Xiaomi’s mobile phone shipments ranked the highest in India’s smartphone market. According to IDC statistics, Xiaomi’s domestic market share in China was 15.1% in the first quarter of 2018, ranking fourth; in the Indian market The share reached 30.3%, ranking first; the global comprehensive market share was 8.4%, second only to Samsung, Apple, Huawei, ranked fourth.
Huge ecosystem
The CDR prospectus disclosed millet's relevant data in the first quarter of 2018. In the first quarter of 2018, Xiaomi’s operating income and net profit attributable to shareholders of the parent company were RMB 34.412 billion and RMB 7.075 billion, respectively, which were attributed to the mother after deducting non-recurring gains and losses. The net profit of the common shareholders of the company was 1.038 billion yuan.
Xiaomi’s revenue comes from four major businesses, including smart phones, IoT and consumer products, Internet services and others. The smartphone business accounts for approximately 70% of Xiaomi’s revenue. In the first quarter, Xiaomi’s smartphone business revenue was 23.239 billion yuan. , Revenue accounted for 67.53%.
Revenue of IoT and consumer products reached 7.697 billion yuan in the first quarter, accounting for 22.37% of revenue. Xiaomi said that it has built the world's largest consumer IoT platform and connected more than 100 million smart devices (excluding mobile phones and laptops). According to the number of connections, Xiaomi's consumer IoT hardware global market share in 2017 was 1.7%.
The gross profit rate of Internet services is the highest. In the first quarter of 2018, Xiaomi's comprehensive gross profit rate was 15.55%. Among them, the gross profit rate of Internet services was as high as 65.58%, while that of smart phones was 8.49%, and that of IoT consumer products was 14.77%.
In the industrial chain, the upstream smartphone business includes chips, cameras, screens, housings, batteries, etc. The main suppliers include Ouffy Technology, Changxin Technology, Helitech, Wentai Technology, Xinwangda, Shentian Tianma, and Sanhuan Group. Lansi Technology and other A-share companies.
In the IoT and consumer goods business, the upper reaches are mostly companies where Xiaomi participates in the investment. For example, the related party of the millet bracelet is Huami Technology, which has now landed on the NYSE. As of March 31, 2018, Xiaomi has established investment and management. An ecosystem of over 210 companies. Among them, more than 90 companies are involved in the development of smart hardware and consumer products.
From 2015 to 2017, Xiaomi paid purchases to related parties of RMB 4.4 billion, RMB 7.148 billion, and RMB 13.265 billion respectively, which accounted for 7.09%, 11.96% and 13.74% of the operating costs in the current period.