The total amount of the above two financing is higher than that of Xiaomi groups IPO Financing of HK $24 billion in July 2018, which also makes the total financing amount of Xiaomi group expected to exceed HK $50 billion after listing.
The placement of about 1 billion shares, equivalent to about 4.1% of the total number of shares issued on the date of the announcement, and about 4.0% of the total number of shares issued after the completion of the subscription. The placing price is HK $23.7 and will be placed by the operator to no less than six independent professional institutions or individual investors. The placing price is about 9.4% higher than the closing price of the shares on the last trading day of HK $26.15 and a discount of about 9.9% from the average closing price of HK $26.29 per share on the last five consecutive trading days.
For this kind of discount placement, Wen Tianna, non-executive chairman of Boda Financial Holdings, told the first finance and economics reporter that Xiaomi groups issuance of bonds and placement before the end of the year was regarded by some investors as seizing the opportunity when the stock price was at a high level and taking advantage of the situation to make large-scale financing, which also led to a setback in the short-term stock price, which made investors have a certain accident in the sensitive period at the end of the year; and for investors who subscribe for convertible bonds It is estimated that they do not want to bear short-term stock price fluctuations.
Xiaomi groups thirst for capital is not just a discount allotment. Xiaomi Group intends to issue zero coupon guaranteed convertible bonds due in 2027 at the initial exchange price of HK $36.74 per share. The initial conversion price is about 40.5% higher than the closing price on December 1.
A Hong Kong stock fund manager told the first finance and economics reporter that convertible bonds are both stock and debt, and have the characteristics of advance can be attacked, and retreat can be kept. When the stock price rises, the price of convertible bonds will follow the rise, and when the stock price falls, the convertible bonds will have the protection of pure debt value. The stock price of Xiaomi group has been deeply adjusted after it was listed in 2018. This year, with the business growth, the share price has improved significantly. Some investors dont want to bear the short-term stock price fluctuations, but as a long-term investment, Xiaomis development is optimistic, and the price premium of 40% is not low.
Xiaomi group said it plans to use the net proceeds from bond issuance and placement and subscription to increase its working capital to expand its business, invest to increase its share of major markets and invest in strategic ecosystems. Issuing bonds has the opportunity to expand the shareholder base, diversify the shareholder structure, improve the companys liquidity, reduce the companys financing costs and raise more working capital.
In the third quarter of 2020, the revenue of Xiaomi group was 72.16 billion yuan, with a year-on-year increase of 34.5%. The adjusted net profit was 4.128 billion yuan, with a year-on-year increase of 18.9%. The third quarter revenue and the adjusted net profit attributable to the parent company were slightly lower than the previous expectations of supermarkets, and both reached a record high in a single quarter. According to canalys data, in the third quarter of 2020, the global smartphone shipment of Xiaomi group rose to the third place, and the market share broke through the record high, rising to 13.5%.
However, the cash flow of Xiaomi group in the first three quarters is not optimistic, and the net cash from operating activities decreased by nearly 40% to 8.35 billion yuan.
After the announcement of the three quarterly reports, before Xiaomi group released the above financing plan, many securities analysts raised flags and yelled for Xiaomis share price. On November 30, Wang Yang, an analyst at Anxin international, said that in view of the foreseeable high-speed growth of various sectors of Xiaomi group in the future, a number of senior executives were introduced to enhance operational efficiency and a target price of HK $29.4 per share was given. On November 28, Wang Liting, an analyst at Haitong Securities, said that Xiaomis product circle was comprehensively distributed, a strong ecological chain system was built, and online and offline low-cost channels were built, and a unique hardware + channel + Internet mode was formed. The mobile phone + IOT + Internet service three-wheel drive, with both growth space and efficiency, is expected to maintain the rapid growth of scale and users. Source: editor in charge of Finance and Economics: Zhong Qiming_ NF5619
After the announcement of the three quarterly reports, before Xiaomi group released the above financing plan, many securities analysts raised flags and yelled for Xiaomis share price.