Xiaomi handed in his mid-year exam report card on August 20. CFO Zhou was endowed with steady growth to describe his performance. Lei Jun, founder and chairman of Xiaomi Science and Technology, shouted beyond expectation on his personal micro-blog and praised the growth of related businesses manually. However, the performance of Xiaomis share price in the capital market was evaluated by the outside world. Price of its performance to the left, stock price to the right.
On the one hand, it is quite impressive performance. According to the financial report, by the end of June 2019, millet group had realized 95.71 billion yuan in business income, an increase of 20.2% over the previous year, and its adjusted net profit was 5.72 billion yuan, an increase of 49.8% over the previous year.
In terms of the closing price on August 21 alone, the market value of HK$896 per share corresponds to HK$214.8 billion. Millet, a high-profile new giant, has evaporated nearly HK$11.3 billion compared with the previous trading day. As of the morning of August 23, millets share price was recovering slightly.
What is the reason behind millets performance to the left and stock price to the right?
Performance Left and Stock Price Right
In the two earnings reports released by millet this year, the two core businesses of mobile phone, AIoT and other businesses almost all show a positive trend, but surprisingly, the stock price after the highlight data always shows the opposite state.
An investor who has been buying millet stocks since the beginning of the listing confessed to reporters that his confidence in Millet has been wilted by reality. Unlike the previous two months, even though millet continued to fall, he still chose to buy in stages, and now he has stepped on the brakes. Millet is under great pressure to reduce its holding capacity. The millet investor told reporters that he did not know when to wait, that can throw out part of the millet stock highs.
Although the above millet investors believe that millet is an early company involved in the field of the Internet of Things. But on a dynamic basis since 2019, millet is hardly a good stock.
Whether millet is an Internet company or a hardware company has been controversial in the industry.
The millet investor attributed his difficulty in boosting his confidence to the fact that there is a problem with millets revenue. Originally, the market for millet companys nature positioning, is to sell mobile phones and other hardware-based companies to earn Internet service costs. Smartphone sales are still the main source of revenue, he said.
According to the financial report, the revenue from smartphone business reached 32.02 billion yuan in the second quarter, accounting for 61.6% of millets total revenue. The total revenue from IoT and consumer products reached 14.94 billion yuan, while the revenue from Internet services and other businesses reached 4.58 billion yuan and 405 million yuan, respectively.
A securities analyst told the Economic Observer that smartphones, IoT and consumer products accounted for more than 90% of the companys total revenue.
The slowdown in shipments has become the current situation facing the whole mobile phone industry, in which millet is unavoidable. Fortune Securities believes that mobile phones providing traffic entrance are the starting point of millet business model, but under the strong competition of Huawei, OPPO and vivo in China, millet mobile phones need to continuously invest a lot of research and development and marketing costs to maintain the hardware position.
In fact, facing the strong encirclement and suppression of competitors, millet seized the market by reducing profits on hardware. In the past four quarters, millet mobile phone business has been focusing on restructuring, rather than purely pursuing the growth of shipments. Zhou Yizi also said on the financial report telephone conference.
In addition to Redmis dual-brand strategy, the millet mobile phone is also more expensive and more expensive. The data show that the average price of millet mobile phone in mainland China and overseas markets (ASP) has increased by 13.3% and 6.7% respectively over the same period of last year. The operating strategy also significantly increased the gross profit rate of mobile phones, from 3.3% in the first quarter to 8.1% in the second quarter, with a quarterly gross profit of 2.57 billion yuan.
In the second quarter, the gross profit margin of millet Internet service remained at 65.6%, far exceeding the profit returns brought by the sales of mobile phone hardware, but the proportion of its revenue to the total revenue was still not high, accounting for only about 8.8%.
The story of AIoT
Prior to this, even if millet fell to its lowest point in the market, the above millet investors will still be optimistic, mobile phone is no good, millet and the story of AIoT can be told. According to the results, IoT and consumer goods revenue increased by 5.9% in the second quarter compared with the same period last year.
Millet connects users through mobile phones, televisions, speakers and other hardware to accumulate user flow pool.
But IoT has a long way to go from layout to evolution.
The relationship between small and medium-sized enterprises in Millet ecological chain and millet is also worthy of attention. The marketing channels of millet can be directly provided to enterprises in the ecological chain for use. Mi Xuelong is the CEO of Ningbo Craftsman Internet of Things Technology Co., Ltd. As a service provider of Xiaomi Home Platform, his daily work core is to help some enterprises connect the Internet of Things household appliances operating system of Mimi Home. Many enterprises in Xiaomi Eco-chain are connected by us.
Michellon said that some small and medium-sized ecological chain enterprises in addition to millet quality, trying to expand the Tianmao, Jingdong these channels, will be more difficult, weak sales channels.
This is also confirmed by a company that has been injected into its ecosystem by millet since 2014. The head of this enterprise told reporters that at present, except for a small number of millet malls, the vast majority of its own brand products are in the channel of millet quality. Its quite possible to develop, but in the long run, we are actively exploring other channels of non-millet.
Michellon emphasized that some enterprise products have high awareness of millet quality and income growth, mostly based on usersstrong trust in Millet eco-chain enterprises. Products go directly to Tianmao and Jingdong, the general consumers awareness of the brand will drop dramatically, and sales will naturally not be as good as products.
In the interview, a person close to the millet platform told reporters, Brands to enter the millet ecological chain, there will be similar verbal exclusion agreement, in addition to the rice platform, can not be connected to other platforms. These people admit that many eco-chain enterprises also want to access Huawei HiLink platform or Alis Skycat Elf, but they have not done so because of a hidden policy of millet.
At present, there are more than 10,000 SKU millet IoT equipment products on Millet home and millet products, which are even called grocery stores by the outside world.
Huaweis pursuit certainly has some influence on millet. Michellon told reporters that, like in the mainstream lighting category, Huaweis core enterprises in the IoT ecological chain will certainly have some impact on millet. However, at present, there is a clear distinction between the two audiences. In his view, the smart products of the millet family attracted more young people with low income, while most of the older middle and high-end income groups preferred Huawei.
In the next IoT layout or Internet of Things entrance race, Millet should not only be on guard against Huawei as the opponent at any time, but also deal with more and more beautiful, gray people on the track.
Apart from Samsung and Huawei, Apple is also jointly developing chips with Intel, which lets Lei Jun see that the top three mobile phone companies in the world have terminals and chips at the same time, and millet must master the core technology to become a great company - to be a Chinese core.
On October 16, 2014, millet quietly set up a subsidiary called Pineal Electronics.
After 28 months from project establishment to mass production, Pineapple Electronics launched its first surging S1 chip, aiming at high and medium-end chips that can be mass-produced. However, after the launch and sale of the mobile phone Millet 5C with this self-developed chip, it fell into an embarrassing situation due to power consumption and fever, which not only led to the cold sales, but also led to the industry. The spearhead is pointed at the core component of the overall performance of mobile phone, processor chip surging S1.
The application effect of the first self-developed chip is not ideal. Just more than a month after Millet 5C was offloaded, in November 2017, at the Millet IoT DevelopersConference, Millet announced that Pineal Electronics was in the product line of developing the NB-IoT module and was expected to be released in the second quarter of 2018. So far, however, officials have not disclosed the latest developments.
When the surging S2 is about to come on the market, on April 2, Millet Group announced the news of pinecone electronic team restructuring: part of the team split into a new company, Nanjing Dayu Semiconductor, and independent financing. After the restructuring, Millet owns 25% of Nanjing Dayu Semiconductor and 75% of the teams collective ownership. Dayu Semiconductor will focus on the development of AI and IoT chips and solutions in the semiconductor field, while Pinecone will continue to focus on the development of SoC chips and AI chips for mobile phones.
The reporter learned that Zhu Ling, CEO of Pinecone Electronics, has pledged the share of equity related to Pinecone Electronics, and is now the legal representative and largest shareholder of Nanjing Dayu Semiconductor. Today, Beijing Pineal Electronics Team is still a few people, product development progress geometry, reporters asked about millet officials, did not get the relevant response.
Since June this year, millets investment funds have joined two chip companies, namely, core microelectronics and Hengxuan technology. At the same time, millet has also invested in three companies: Lexin Technology, Jingchen Semiconductor and Nanxin Semiconductor, the first two of which have been listed on the Sci-Tech Creative Board. According to public information, Lexin Science and Technology mainly supplies its Internet of Things chips to millet. We are increasing our investment in many core devices. Speaking of investment in the chip industry, Zhou said that the above actions in the industry supply chain are all strategic investment purposes, in order to strengthen the grasp of advanced research and development technology and manufacturing process.