Wen Yi Chen Xuanbin
Source: Intelligent Relativity
On August 20 th, Beijing time, Xiaomi released the performance announcement for the second quarter and the first half of 2019.
Since then, on the 21st, Xiaomi’s share price has declined, which is in sharp contrast with the growth performance data in the financial report. The contradiction between the top and bottom can not help but make people think about Xiaomi’s current market situation.
The financial report shows that in the second quarter of 2019, Xiaomi’s total revenue reached 51.951 billion yuan, up 14.% year-on-year and 18.7% quarter-on-quarter. The adjusted net profit reached 3.635 billion yuan, up 71.7% year-on-year and 74.7% quarter-on-quarter.
Judging from the revenue situation, whether compared with the same period last year or the performance in the first quarter, Xiaomi’s data showed a rare overall growth, with a significant growth rate, and its performance in the second quarter was still very impressive.
Then, is the decline in Xiaomi’s share price due to the fact that the data of segment revenue does not meet market expectations? Or is it because the market underestimates the future performance of Xiaomi?
The remarkable data behind this financial report may give some thoughts to answer doubts.
Xiaomi in the financial report: mobile phones are facing downward pressure, and the growth of IoT is not significant enough.
At present, Xiaomi’s branch revenue is mainly composed of smart phones, IoT and consumer goods, Internet services and overseas income.
The branch income of smart phones has always been Xiaomi’s main support. In the second quarter, Xiaomi’s smartphone revenue reached 32 billion yuan, up 5.0% year-on-year, with sales of 32.1 million units. According to Canalys’ data, the domestic sales volume in this quarter was about 11.5 million units, that is, about two-thirds of the sales volume was driven by foreign markets.
According to the financial report, in the second quarter of 2019, Xiaomi’s smartphone shipments ranked fourth in the world, and its market share increased to 9.7%, but it is still difficult to hide the difficulties behind it.
According to Canalys’ data, the performance of Xiaomi smartphones in the domestic market has declined by 20%, which is the largest decline among mobile phone brands TOP5, and the competition in the head market is facing tremendous pressure from Huawei.
Similarly, in terms of IoT and consumer goods, the segment revenue reached 14.9 billion yuan, up 44% year-on-year, which seems to be more remarkable than smart phones. However, compared with the revenue of 12 billion in the last quarter, the growth rate of the chain is 24.17%, which can only be described as steady growth.
Of course, splitting the single product performance of this division can also show that Xiaomi has strong product capabilities in making household appliances.
According to the statistics of Aoweiyun. com, as of June 30, 2019, Xiaomi TV ranked first in the mainland market share for six consecutive months, and also ranked first in the Indian market for five consecutive quarters. The overall shipments ranked first in the world. Five.
According to the specific data, in the second quarter, the shipment of Xiaomi TV was 2.7 million units, and the shipment of Mijia air conditioner was about 1 million units. The commercial reproduction of Xiaomi model is continuously falling into household products, with remarkable results.
Combined with the market performance of IoT explosive products such as Xiaomi notebook, mi band 4, Xiaoai teacher, Mijia smart door lock, etc., under the guidance of the dual-engine strategy of "mobile phone +AIoT", Xiaomi still has a high ceiling.
Although Lei Jun defined Xiaomi as an Internet company, the revenue of Xiaomi’s segment in Internet services was not too high, with revenue of 4.6 billion yuan, up 15.7% year-on-year and 6.98% quarter-on-quarter, which was slightly weak.
In terms of splitting, the advertising revenue was 2.5 billion, down 0.6% year-on-year. In the case of weak domestic advertising market as a whole, the data of other peers are not very good-looking. Xiaomi is not a strong media brand in the Internet market, and it is understandable to follow the macro environment.
However, it is worth noting that the revenue of Xiaomi Games was 675 million yuan, a year-on-year decrease of 4.1%. With the growth of Tencent, Netease, Shanda and other games, Xiaomi’s game performance is really surprising, not to mention its close relationship with Jinshan Xishanju, but it is difficult to see the game products.
The revenue of other parts was 1.4 billion yuan, up 89.9% year-on-year, mainly due to the rapid growth of financial technology services and quality e-commerce platforms.
For the first time, the financial report released the relevant data of quality e-commerce, with GMV reaching 3.8 billion yuan, up 113.9% year-on-year. Among them, in June, more than 65% GMV came from non-Xiaomi mobile phone users. It can be seen that the construction of Xiaomi’s selected e-commerce brand has a miraculous effect, and it has won both word of mouth and market.
However, as far as the current development is concerned, the head effect of e-commerce is also very obvious. Selected e-commerce is facing the competitive pressure of big e-commerce brands such as Taobao Xinxuan and Beijing Tokyo Manufacturing, and the growth is not optimistic.
Therefore, judging from the financial report data, Xiaomi’s business has indeed increased, but the growth rate is not enough to make the capital market eliminate concerns about Xiaomi’s future development and appear undervalued.
Xiaomi now: Why is the capital market undervalued?
The trend of stock price often reflects the confidence of the capital market in the future development of a company. Xiaomi has just been selected as one of the top 500 companies in the world, and its financial report data is bright, which should be a popular trend. Why did it get beaten when it came to the capital market?
So, where is the market’s concern about Xiaomi? "Intelligent Relativity" holds that there are three considerations.
First, the positioning of Xiaomi.
Although Xiaomi’s self-positioning lies in Internet companies, the market does not seem to buy it. Judging from the proportion of segment income in this quarter’s financial report, smartphones accounted for 61.6%, IoT and consumer products accounted for 28.8%, and Internet services accounted for 8.8%. The primary and secondary status was clear at a glance.
Xiaomi is more like an intelligent hardware company, more precisely a smart phone brand, and the market awareness of "Xiaomi = mobile phone" has been strengthened in data.
Although Xiaomi has raised the ceiling of its own development to a certain extent with the development of IoT products, if it is evaluated by business data, as a mobile phone brand, this ceiling will undoubtedly face collapse again.
In recent years, the smartphone market has been frequently cold. In the second quarter of 2019, the domestic mobile phone market fell by 6% again, and shipments have fallen for nine consecutive quarters to 97.6 million units. In addition to Huawei, other mobile phone brands are facing different degrees of downward trend, and the risk of the mobile phone market is expanding.
As the Xiaomi mobile phone with the most serious decline, it is not optimistic about the market, not to mention that with such a strong competitor of Huawei in the front, Xiaomi has to bear greater pressure.
Although Xiaomi cc has not announced the specific shipments, there is indeed a certain gap between the pre-sales volume of JD.COM platform and Huawei nova5. Lei Junjian’s strategic counterattack seems to have failed by taking a slant and opening the way to "her market"
Therefore, even if it is unfair to regard Xiaomi as a mobile phone brand, how many new stories can Xiaomi tell on the smart phone?
On the cusp of 5G, Huawei’s mobile phone performance is so strong that it has almost firmly grasped the attention of the entire market. How much time is left for Xiaomi’s mobile phone?
The greater the pressure faced by Xiaomi mobile phone, the more concerns the capital market has about Xiaomi mobile phone, which is a very realistic thinking cognition.
Second, Xiaomi’s ecological chain operation.
Judging from the financial report data, Xiaomi currently invests in more than 270 companies with a total book value of 28.7 billion yuan, a year-on-year increase of 20.8%. Among them, as of the announcement date, 12 companies related to Xiaomi’s supply chain have been invested, and three of them have been listed in science and technology innovation board, China.
Behind this data is the expanding ecological chain map of Xiaomi.
Based on the aggregation and synergy of ecological chain, Xiaomi’s categories in IoT and consumer products have grown strongly, and its entry and break are very rapid, and it often becomes the showstopper of traditional market structure, such as TV and air conditioning.
However, after the eco-chain, it also exposed two major problems that Xiaomi has been criticized by the market, "OEM" and "quality control".
Take "Mijia sweeping robot" as an example. Xiaomi didn’t want to make a robot from scratch, so he entrusted it to Roborock for OEM, and Roborock didn’t have its own factory, so he entrusted Xinwangda to process and manufacture it, and finally sold it with the brand endorsement of Mijia products.
Under the overall supply chain process, the advantages and disadvantages are very obvious.
The advantage lies in the synergy of the ecological chain. Xiaomi can quickly cut into an industry category with less resources, and the market response is rapid. At the same time, the subsidiary specializes in the research and development of a single category, and its professional ability is stronger.
The disadvantage is that the extension of the supply chain makes Xiaomi’s supervision of product production more restricted, which increases the difficulty of quality control and complicates after-sales service.
With the expansion and complexity of Xiaomi’s ecological chain, the cooperation between them is closer and more divergent. At that time, whether Xiaomi can completely dominate the development of the entire industrial chain is also facing market torture.
What is clear is that under the leadership of such an ecological chain, the future millet will also enter the stage of ecological development, and its dependence on partners will continue to deepen.
Third, a conservative assessment of Xiaomi’s AIoT strategy.
Although the forecast for the development of AIoT is optimistic, the popularity of 5G is just around the corner, and the layout of Xiaomi in AIoT has been settled for many years, before the real commercial benefits broke out, the market still had a somewhat conservative evaluation of Xiaomi’s strategy.
First of all, Xiaomi doesn’t have many years of market accumulation and channel precipitation like traditional home appliance manufacturers. As a newcomer in the industry, it still takes the cost-effective route. Low-cost marketing is a spoiler everywhere and makes many enemies.
Secondly, today’s traditional home appliance manufacturers have gradually begun to lay out AIoT, and their cooperation with Ali and JD.COM has become increasingly close. Xiaomi’s early layout has begun to be tied by traditional players before the commercial benefits broke out.
Finally, AIoT will be a protracted war. Even if Lei Jun carefully sets Xiaomi’s five-year plan, can Xiaomi afford this future seesaw and usher in a real commercial outbreak? !
The prospect of AIoT may be bright, but the market’s evaluation of Xiaomi is not completely optimistic. Choosing the right direction still needs to do the right thing in this direction, and Xiaomi still needs to face the test of the market.
Future Xiaomi: AIoT and e-commerce still have stories to tell.
In the current Internet public opinion, there are many voices that sing down Xiaomi, but judging from Xiaomi’s financial report data, "Intelligent Relativity" believes that there are still stories to tell about Xiaomi in the future.
First of all, as of June 30, 2019, the total cash resources of Xiaomi increased by 35.9% compared with the previous quarter to 51.1 billion yuan. Combined with the current steady growth of revenue performance, Xiaomi’s ability to resist risks is quite strong and its operation is healthy.
Secondly, there are two more important data in business. First, more than 65% of GMV contributions of Xiaomi’s products come from non-Xiaomi mobile phone users, and second, more than half of the active users of Mijia App based on AIoT ecosystem account for non-Xiaomi smartphone users.
Through these two sets of data, it can be seen that Xiaomi’s Internet business, that is, e-commerce and AIoT open platform, presents a relatively good development trend and still has a large potential growth space.
Similarly, it also shows that Xiaomi’s brand image is still in a relatively positive position in the market and has a positive effect on the attractiveness of third-party users.
Then, for Xiaomi, a good brand reputation is undoubtedly a great guarantee for the current development.
Even though the current development of mobile phones faces many challenges during the market transformation of 5G, the strong performance of foreign markets and the steady growth of AIoT products are enough to level the gap between downturn and growth.
Xiaomi has always been a topical company on the Internet. Due to the biased estimation of Xiaomi’s business and the pessimism about the overall industry economy, the sensitive reaction of the market needs Xiaomi to produce stronger performance to maintain stability.
Xiaomi, you need to play a little better!
[End]
Intelligent Relativity (WeChat ID: aixdlun): AI new media, the winner of today’s headline Qingyun Plan TOP10, the article "occupied" the TOP10 of titanium media hot articles list for a long time, and wrote "100,000 Why’s Artificial Intelligence", focusing on the following areas: AI+ medical care, robotics, intelligent driving, AI+ hardware, Internet of Things, AI+ finance, AI+ security, AR/.
