In the morning of December 1, Xiaomi was temporarily suspended. In the afternoon, Xiaomi announced the financing plan of issuing bonds and rights issue shares. Xiaomi resumed trading at 1:00 p.m., and its share price plummeted for a time, falling by more than 10%, and then narrowed. By the time of publication, Xiaomis share price fell by 6.5%, and its stock price was HK $24.45, with a total market value of HK $591.5 billion, which was more than HK $40 billion evaporated from yesterdays closing.
According to the announcement, Xiaomi will issue US $855 million seven-year zero coupon guaranteed convertible bonds. The initial exchange price will be HK $36.74 per share, which is about 40.5% higher than the closing price before the announcement. Assuming that the bonds are fully converted at the initial exchange price, the bonds can convert about 180 million shares, equivalent to about 0.7% of the issued share capital and about 0.3% of the voting rights on the announcement date.
At the same time, the announcement also said that the company intends to issue 1 billion shares through allotment at a price of HK $23.7 per share, about 9.2% discount from the average closing price of HK $26.10 per share in the last ten trading days, and the net financing of the rights issue is US $3.1 billion.
Xiaomi groups issuance of bonds and rights issues raised nearly US $4 billion (about HK $31 billion). Xiaomi said the money will be used to increase working capital to expand business, invest to increase market share in major markets, invest in strategic ecosystems and other general corporate purposes. After the resumption of trading, due to the decline of its share price, the maximum evaporation of Xiaomis market value exceeded HK $60 billion.
It is worth noting that Xiaomi 11 will be the worlds first high pass snapdragon 888 processor. The snapdragon 888 is a new flagship processor released by Qualcomm. It is the most powerful mobile platform of Qualcomm so far. In addition to leading 5g performance, it also upgrades AI, games and video.
At present, ASUS, black shark, Lenovo, LG, Meizu, Motorola, Nubia, realme, Yijia, oppo, sharp, vivo and ZTE are also the mobile phone manufacturers that will carry the snapdragon 888.
Since the beginning of this year, Xiaomis share price has risen by more than 127% since the beginning of the year. During this period, the highest price of Xiaomi stands at HK $27.6, setting a new record high.
Mobile phone sales in the third quarter ranked the third in the world, leading to divergent views
In terms of smart phone business, Huaweis mobile phone shipment has shown an obvious downward trend after the recent pressure on chip supply, and the vacant market space is quickly filled by Xiaomi. This trend has been shown in the recent statistical data of the global mobile phone market.
According to a report released by Gartner, Xiaomi surpassed apple for the first time with 44.4 million units in the third quarter of this year, with Apples sales of 40.5 million units in the current quarter, and Xiaomi has the strongest growth among the top five smartphone manufacturers in the world.
However, some institutions are not optimistic about the future of Xiaomi. After Huawei sold glory last month, Citigroup issued a research report, pointing out that glory and Xiaomi have fierce competition in the mainland, and there is also a large degree of overlap in the market and sales channels. As the competitiveness and structure of glorys future are still unclear, I believe that the market may need to lower its expectation on Xiaomi, which will bring down the companys profit and valuation risks. Although the bank has a positive view on Xiaomis recent development, it believes that its risk return is not attractive. This transaction may bring downward risk to the company. It has been rated as sell with a target price of HK $19.3.
Source of this article: Chen Hequn, editor in charge of securities times_ NB12679