Millet not just Hard Suits Inc profit growth still rely on hardware business

category:Internet
 Millet not just Hard Suits Inc profit growth still rely on hardware business


Although Lei Jun emphasized in the prospectus, millet is not just a Hard Suits Inc, but an innovation driven Internet Co. While choosing a comprehensive net interest rate for low - hardware business, the thunder army plans a path to Internet companies to provide Internet services with high interest rates. On the one hand, the ecological chain Internet business and the contribution of the ecological chain enterprise profit are still small. On the other hand, the global mobile phone market is saturated. This can not help but ask people, how high is the future ceiling of millet? Internet service business Maori Millet prospectus disclosed that the company lost 43 billion 889 million yuan in 2017. This was also seen in the listing of the IPO companys Hong Kong stock market because of the fair value change of the convertible redeemable preferred stock. Millet related people responded that Internet Co usually has multiple round financing convertible redeemable preferred shares. Under international accounting standards, the preferred stock will be debt to shareholders, the so-called debt figures will disappear at the moment of listing, not real losses, and not to the company. The actual operation has an impact. What is the profitability of millet with more than 10 billion profit? According to Lei Juns Triathlon business model described in the open letter, millet has exceeded 100 billion revenue in 7 years with hardware, new retail and Internet services. Lei Jun also stressed that millet always adhere to the hardware composite net interest rate does not exceed 5%. Millet stressed that the integrated net interest rate of hardware is not more than 5% in the prospectus without direct financial indicators, but millet comprehensive (including smartphones, Internet services and smart hardware) in 2017 (including smart phones, Internet services and smart hardware) was 4.7% and hardware gross interest rate was 8.7%, the highest in three years. At present, the profit growth of millet still relies on hardware business. In 2017, the total revenue of smartphones and IoT and consumer products accounted for more than 90%, and Internet services accounted for only 8.6% of total revenue, while millet Internet services accounted for 4.9% and 9.6% in 2015 and 2016, although Internet service revenue increased by 101.8% and 51.4% in 2016 and 2017 respectively. But there has not been a breakthrough in the proportion of total revenue contribution. In addition, the gross profit margin of gross profit of Xiaomis Internet service business has been decreasing year by year in the past three years. According to the data listed in the prospectus, the gross profit of the millet Internet service business in 2017 accounted for about 39.33% of the total, and the gross profit of 2015 and 2016 was 76.99% and 58.05% respectively. This means that while the gross profit margin is being expanded, the contribution capacity of the Internet service business has not been improved at the same time. Prospectus shows that its Internet service business gross profit margin in recent three years (2015~2017) followed by 64.2%, 64.4%, 60.2%. The growth of Internet services revenues ultimately depends on the size of users and user participation and the level of expenditure. In the prospectus, the Internet service income comes from advertising and Internet value-added services (mainly online games). The contribution of advertising services is slightly higher than that of value-added services. From 2015 to 2017, it accounted for 56.2%, 58.7%, and 56.7%. On the other hand, the sales and promotion expenses of millet are increasing year by year, 1 billion 913 million yuan, 3 billion 22 million yuan and 5 billion 232 million yuan in turn from 2015 to 2017. Millet explained that with the rapid expansion of the millet home network, millet is expanding the sales and promotion team for brand, product and service promotion, in mainland China and the world. Promotion activities in his region have also increased. First disclosure of the relationship with ecological chain enterprises For the purpose of raising funds, millet in the prospectus said that 30% of the funds raised for research and development and development of core products, 30% for the expansion of investment and the strengthening of IoT and consumer products and mobile Internet services and other ecological chains, 30% for global expansion, 10% for working capital and general corporate uses. In 2013, Xiaomi launched the ecological chain plan, setting the target of investing 100 eco chain enterprises in 5 years. The layout is based on the Internet of things represented by intelligent hardware and household appliances, trying to find another pole of growth beyond the mobile phone business. As of March 31, 2018, millet has invested or incubated more than 210 companies, of which more than 90 are focused on the development of intelligent hardware and the ecosystem of consumer products. In terms of the investment targets of the eco chain, Xiaomi indicated that it should choose a minority equity investment. Specifically, we should support early hatching, product design and R & D support, supply chain management and so on. Millet helps ecological chain enterprises through the professional experience of self - brand, capital, supply chain, product design and management, and efficient online and offline retail networks. According to the statistics of 2017 shipments, the worlds first mobile power supply, air purifier, electric step car company and the first smart wearer company in mainland China are all millet ecological chain enterprises. Most of the ecological chain enterprises that invest in Millet are named after one meter, with purple rice, Chi MI, Hua MI and Yun Mi as representatives. Millet in the prospectus, the investment in ecological chain enterprises mainly through Tianjin Venus Investment Limited, Tianjin Jinmi investment partnership, most of the investment is less than 20 million of the RMB. The above investment will not be consolidated with the financial statements or part of the group. To sum up, millet is mainly financial investment. As of 2015, 2016 and December 31, 2017, the investment income of millet has been RMB 534 million yuan, RMB 30 million yuan and RMB 283 million yuan, respectively. As of 2015, 2016 and December 31, 2017, the long-term investment income in the profit and loss according to the fair value was RMB 2 billion 800 million yuan, RMB 2 billion 700 million yuan and RMB 6 billion 400 million yuan respectively. The daily economic news reporter noted that the eco chain enterprise is also a supplier of millet related hardware products, allowing millet to account for 60 to 90 days. The product of ecological chain is also reflected in the business of IoT and consumer products, and proceeds with the ecological chain enterprises. However, the main business of Xiaomis TV business is millet TV, router, millet computer and so on. The data showed that the income of millet IoT and consumer products increased from RMB 12 billion 400 million yuan in 2016 to RMB 23 billion 500 million yuan from 88.9% to 2017. In 2017, millet accounted for 20.5% of the total revenue. Source: Daily Economic News Editor: Yao Liwei _NT6056 As of 2015, 2016 and December 31, 2017, the investment income of millet has been RMB 534 million yuan, RMB 30 million yuan and RMB 283 million yuan, respectively. As of 2015, 2016 and December 31, 2017, the long-term investment income in the profit and loss according to the fair value was RMB 2 billion 800 million yuan, RMB 2 billion 700 million yuan and RMB 6 billion 400 million yuan respectively. The daily economic news reporter noted that the eco chain enterprise is also a supplier of millet related hardware products, allowing millet to account for 60 to 90 days. The product of ecological chain is also reflected in the business of IoT and consumer products, and proceeds with the ecological chain enterprises. However, the main business of Xiaomis TV business is millet TV, router, millet computer and so on. The data showed that the income of millet IoT and consumer products increased from RMB 12 billion 400 million yuan in 2016 to RMB 23 billion 500 million yuan from 88.9% to 2017. In 2017, millet accounted for 20.5% of the total revenue.