The resumption of Xiaomis cards will collapse! Financing plan has just been exposed: it plans to raise HK $31 billion

category:Finance
 The resumption of Xiaomis cards will collapse! Financing plan has just been exposed: it plans to raise HK $31 billion


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.

The brilliant results are also reflected in the financial report. In the third quarter, Xiaomi achieved revenue of 72.2 billion yuan, a year-on-year increase of 34.5%; adjusted net profit of 4.1 billion yuan, a year-on-year increase of 18.9%; the total income of overseas market was 39.8 billion yuan, a year-on-year increase of 52.1%. As many as 15 financial report data set a record high in a single quarter, far exceeding market expectations.

Recently, many big banks look at the stock price of many millet. CICC, Credit Suisse, Bank of communications, Goldman Sachs and other institutions improved their stock price ratings. Among them, CICC raised the target price of millet to HK $34. It is recommended to pay attention to the change of Xiaomis mobile phone market share.

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. The Bank of America report believes that Huaweis sale of glory mobile phone brand business will not pose a threat to Xiaomi in the long run. Different from Huaweis medium and high-end strategy, glory aims at medium and low-end markets. It is estimated that glory accounts for about 30% to 35% of Huaweis shipping volume. Without separation from Huaweis system, without scale, core R & D resources and channel support, glory will be hard to compete with local leading enterprises such as Xiaomi, oppo and vivo. The bank maintains Xiaomis buy rating with a target price of HK $26. Source: Securities Times editor in charge: Zhong Qiming_ NF5619

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.

The Bank of America report believes that Huaweis sale of glory mobile phone brand business will not pose a threat to Xiaomi in the long run. Different from Huaweis medium and high-end strategy, glory aims at medium and low-end markets. It is estimated that glory accounts for about 30% to 35% of Huaweis shipping volume. Without separation from Huaweis system, without scale, core R & D resources and channel support, glory will be hard to compete with local leading enterprises such as Xiaomi, oppo and vivo. The bank maintains Xiaomis buy rating with a target price of HK $26.