However, some institutional sources believe that the upward trend of Xiaomi may not last long. After this wave rises, the stock price will slowly return to value.
Multiple factors benefit the stock price
Straight Flush data showed that on July 10, Xiaomi broke through the issue price by 13.1% to close at HK$19/share. On July 13, Xiaomi once surged to HK$21.8/share, and finally closed at HK$21.45/share. At 11.37%, the total market value is as high as 479.968 billion.
In terms of turnover, on July 13, the transaction volume of Xiaomi reached 7.622 billion Hong Kong dollars, far exceeding the turnover of Tencent Holdings on the same day of 4.679 billion Hong Kong dollars.
It is worth noting that after Li Ka-shing, Ma Yun, and Ma Huateng subscribed for Xiaomi stock in their own name, in the past week, Lei Jun once again demonstrated his strong circle of friends, and the big men have their platforms. Financial media person Wu Xiaobo issued a message saying that he bought Into the $200,000 millet stock, Xiaopeng Automobile founder He Xiaopeng said that he has subscribed for $100 million in Xiaomi stock from the secondary market with personal funds. On July 13, Midea Group also said on the interactive platform that Midea Group holds Xiaomi Nearly 100 million shares.
However, the industry insiders believe that the Daxie platform is not the main factor in the rise of Xiaomi's stock price. Investors will not follow the big ones. The main reason for the rise in Xiaomi's stock price is the release of a series of good news.
Hong Kong South China Financial Group senior strategist Qi Zhiyong told the "Securities Daily" reporter that the first day of Xiaomi's listing is to open futures, options, derivatives trading, which is very rare in the past, can play the role of cutting peaks; The addition of index constituents allows Shanghai-Hong Kong Stock Connect investors to trade, with buyer support, and the company's share price is expected to rise for some time.
According to the release of the FTSE Index on July 9th, the company will officially introduce Xiaomi into the FTSE China 50 Index after the market close on July 13, and will take effect on July 16. On the same day, Hong Kong Hang Seng Index Company also released The index change notice stated that Xiaomi will be included in the Hang Seng Composite Index and will take effect on July 23.
'Joining the Hang Seng Composite Index will first have a strategic placement fund to enter, and there will be a chance to become a Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect Index (component) stock, which is the most important. ' Futu Securities Chief Executive Officer Wei Biwei on Securities Daily "Reporter said.
However, on July 14, Shanghai and Shenzhen Stock Exchange jointly issued a notice stating that the company with different rights structure will not be included in the Hong Kong stocks. This also means that Xiaomi is the first company to have the same rights. The market has voices worried that millet's rising market may be suspended, and the stock price may be under pressure.
In addition to the good news, Xiaomi IPO is the green shoe mechanism that is also a big helper to stabilize the stock price. Hong Ying, chief strategist of Bank of Communications International, told the Securities Daily that the reason for the rise in Xiaomi’s share price is because of the initial stage of listing. Price stability mechanism, as the Morgan Stanley underwriting group, Goldman Sachs and others will take some price stabilization measures in the trading market. After a month's price stability period, Xiaomi's share price is likely to fall back.
It is understood that Xiaomi launched the green shoe mechanism in the IPO, that is, the over-allotment option mechanism, issued about 200 million new shares through green shoes, which is almost twice the number of shares offered by Hong Kong companies, thus stabilizing the stock price trend after listing.
Value is still controversial
In fact, even if Xiaomi's share price is gratifying, the industry still has different opinions on whether Xiaomi's share price truly reflects its own value.
'A good company is not necessarily a good stock. This is two different issues.' During the interview, many interviewed industry insiders expressed this view to the Securities Daily reporter.
Xiaomi stakeholders have confessed to the "Securities Daily" reporter, Xiaomi is a good company, Lei Jun is also a very good entrepreneur, but good stocks depends on where to buy.
In Hong Yan's view, the first day of the break of Xiaomi's listing indicates that the market is still skeptical about Xiaomi. 'It (Xiaomi) must continue to grow very fast to be able to get the current valuation. ' Hong Wei vs. Securities Daily The reporter said that in the current "hardware + Internet + new retail" 'triathlon' model of Xiaomi, in fact, Apple has done very well, but the price-earnings ratio is only about 16 times. And Xiaomi's existing business The model is still not successful. At present, more than 70% of the revenue comes from hardware. In recent years, millet has grown very fast, but the source of growth is low-profit growth. Xiaomi needs to prove its business model and story to the capital market.
Xiaomi's prospectus shows that the main source of revenue for Xiaomi is still hardware. Among them, smartphone revenue accounts for 70.3%, IoT and consumer products account for 20.5%; Internet service only accounts for 8.5%, other proportion 0.6%. An analyst from Hong Kong, China Merchants Securities bluntly told the Securities Daily reporter that if you look at the value investment, there are a lot of stocks in Hong Kong that are cheaper than Xiaomi, and the margin of safety is bigger. The current market gives Xiaomi a higher estimate. Value and pricing may be considering its technology and ecological chain attributes. 'Millet itself is not the mobile phone, but the whole ecology. This is its moat. Millet needs to constantly strengthen its moat.'
However, Xiao Shi’s early investor GGV (Jiyuan Capital) management partner Tong Shihao is supporting the Xiaomi 'Iron Triathlon' model. On the day of Xiaomi’s listing, he told the Securities Daily reporter that Xiaomi’s own “triathlon” model, The average company has never heard of it. They need time to understand. This is a natural thing. He believes that the model of Xiaomi is not only available in China, but also applicable overseas. There is still a lot of room for growth overseas. The potential of Xiaomi's Internet service business is far from being tapped.
'The HKEx needs more time to understand the technology stocks. In the past ten years, the securities companies of the Hong Kong Stock Exchange have only seen one Tencent. Most investors have not witnessed the growth of a large number of technology companies in the Mainland. But people are very smart, give them time to understand. 'Tong Shihao said.