Why is Xiaomi worth a "value revaluation"?

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Why is Xiaomi worth a "value revaluation"?

2021-11-26 00:17:29 5 ℃

Wen | No rust

On November 23, Xiaomi Group released the 2021 Q3 financial report. Compared with the previous year, the revenue reached 78.1 billion yuan, an increase of 8.2% year-on-year. The net profit after adjustment can reach 5.2 billion yuan, a year-on-year increase of 25.4%.

From the segmentation, each business has a steady growth. Among them, the growth of Internet business growth is strong, and the revenue reached 7.3 billion yuan. Aiot has achieved significant breakthroughs, MIUI's global monthly household household exceeded 500 million, and the number of AIOT connection was 400 million. The overseas market has also been very bright, with a total income reached 40.9 billion yuan, and the overseas Internet service revenue increased by 110.0% year-on-year, creating a new high.

In terms of the main business, Xiaomi's global smartphone shipments reached 43.9 million yuan, the global market share is 13.5%, ranked first in 11 markets in the world.

Outside the embarrassment, walk over 2021, how is the overall performance of Xiaomi, how can the next stage of the enterprise will present?

Based on this, this article will make a reflection on the following three questions, comprehensively interpreted Xiaomi's Q3 financial report, as well as the future direction.

1. In the third quarter, in the face of unfavorable market environment, how to adjust millet?

2. Where is the future growth space of Xiaomi's future?

3. Does Xiaomi need a new valuation logic?

The market is confusing, how is Xiaomi to "steadily move"?

Macro looks, this third quarter, the market environment of the undulating market environment is still continuing.

The first is the industry environment, this year's Q3 quarter, industry core components and chips are not well mitigated.

Peter Winni, CEO, one of the world's largest semiconductor equipment manufacturers, recently said that the demand for high-tech products is unexpected, even if it is expensive to produce, at least the factory is required. Wait until 2022 can meet today's output demand.

Affected by this, global intelligent hardware brands are "Terry".

Data statistics show that the third quarter of 2021, global smartphone shipments fell by 6.7% year-on-year, even the Samsung, which is the top volume of the second quarter, also due to supply chain, a year-on-year decline in fell by 14.2%.

On the other side of the consumption environment, there is a second-quarter 618 carnival, and there is a three-quarter double eleven hand, and the third quarter of the middle is also the "downturn" in the electronic consumption industry.

Compared to macro revenue data, many of the external environments are unfavorable, so that Xiaomi's "steady growth" is more difficult and precious.

This also benefits from the strategic adjustment of the company in the market fluctuation, in the product, facing the industrial collective dilemma, Xiaomi with a series of product structures, with high-end, subdivision demand for pushing, realizing the product Broad wide incremental users.

Take the new product XIAOMIVI launched on September 27 as an example, its overall target user is biased towards women, on the basis of technology, matches the demand of this group, facing fashion, light, good-looking direction, and many users Praise the "2021 mobile phone color ceiling".

Prior to this, Xiaomi also launched a high-end smartphone in the MIX series of the main black technology, the flagship product 11 series, etc. This series of differentiated product matrices have created significant drawbacks. The relevant data showed that Xiaomi's new users, including XIAOMI MIX FOLD, XIAOMI 11 Series, etc., more than 50 %.

At the consumer end, the "window period" of traditional electronic products is consumed, and millet is also grasping the short board and cultivating the internal power.

Q3 Financial Report shows that in the past three months, Xiaomi is accelerating new retail, and actively expands the online channel while consolidating existing e-commerce channel advantages. As of the end of October 2021, Xiaomi's online store in mainland China has exceeded 10,000 households.

In view of the macro, it is also the depth layout on this channel, so that Xiaomi can span all the cities and directly contact consumers. This stable and direct line interaction has become a "fixed sea god needle" in the brand on the rolling line to a certain extent.

On this basis, the innovation represented by the products and channels is not only the key to the stable performance of millet in the turmorn era, but also for its future growth vectors.

Overseas + How to create an increase engine?

If the change in the products and channels gives the strength of Xiaomi's "riding wind and waves", then the technical development and overseas layout of the two extensions will be the next quarter of Xiaomi, which describes the infinite delusion of growth.

From the Q3 financial report, in addition to the steady growth of the performance, the improvement of Xiaomi's profitability is also the same as the eyes.

Behind the huge mobile phone shipments, the growth of high-end products is the key to boost enterprises "strong profit".

According to the capital market, it is benefited from the increase in the shipments of high-end smartphone, Q3 quarter, Xiaomi smartphone ASP (average sales price) increased by 6.7% year-on-year.

Take overseas area as an example. Currently, Xiaomi's high-end smartphone is popular in Latin America, Western Europe, the Middle East and other regions. Q3 quarter, Xiaomi's high-end smartphone shipments increased by 180.0% year-on-year, driving ASP and growing.

The deep cause behind this is that the light of millet is in the excellent accumulation of the R & D technology. On the other hand, it also leavins the channel construction of the overseas market operators. To seize the high-end market, the technical strength is first too hard.

In this year, Xiaomi still showed the determination of imported research and development. In the first three quarters of 2021, Xiaomi R & D accompisculated expenses reached RMB 9.3 billion, a year-on-year increase of 51.4%.

According to reports, in the third quarter, Xiaomi launched self-discipline cold pump cooling technology, which enables twice the heat dissipation capacity of VC. In addition, Xiaomi also launched MIUI12.5 enhancements, from the underlying framework to the upper layer application optimization experience. This series of strategies and technological efforts, let Xiaomi's high-end smartphone shipments in the first three quarters, higher than 10 million units last year.

In November, in the 5G performance evaluation list announced by China Telecom, Xiaomi and Redmi brands took the first price, which allowed the public to see the technical strength of Xiaomi mobile phone.

Not only that. Xiaomi synchronizes the channel construction of the overseas market operators. Q3 Financial Report shows that in the first three quarters of 2021, Xiaomi has exceeded 18 million units of mobile phone shipments in India, a year-on-year increase of 220%. Among them, mobile phone shipments in the number of operators such as Western Europe, Latin America and other regions have achieved steady improvement.

In the future, as Xiaomi's shipments grow in the domestic and foreign market, and the high-end market continues to advance, the overall revenue and profits of the brand are still worthy of imagination.

Xiaomi is worth a "value revaluation"

In addition to the success of the mobile phone, this three quarterly reported another surprise that brought the market is the excellent development of the AIOT business.

Objectively, referring to the "mobile X Aiot" policy proposed a year ago, the first three quarters of 2021, the performance of Xiaomi was "rusible".

In macro, the smart network ecology of the millet, computer, flat plate, audio, air conditioner, washing machine, sweeping robot, etc. have basically been completed, and there are many star items.

Whether it is the smart home appliance series of rice refrigerator cross four-door exclusive version, Mijia free washing sweeping robot, Mijia new wind air conditioner and other high-end new products, still in 11 consecutive quarters, China first, the top five millet TV They are all affected by Xiaomi's intelligent product ecology in the market.

Unfortunately, for Xiaomi's growing performance results, the reactions of the capital market are not well called.

The root cause is the market for Xiaomi's valuation logic, and there is no peace with the times, still staying in the template of the former "hardware company".

In the capital market, the PE multiple of hardware companies belonging to 10-20 times, which is also consistent with the current 16.5 P / E ratio of Xiaomi.

However, accompanying the high songs of Xiaomi Internet business, and the ecology of the AIOT product ecology, the past valuation logic, obviously have been outdated.

The value of the hardware company is in a low position, and the core reason is that the goods do not have continuity. The low profit of the manufacturing itself has lowered the brand's premium space.

Throughout the global hardware brand, in order to meet the requirements of the investment, most companies have to be strong, and even cut off the main business, only for the increase in profit margins, Lenovo, IBM is in which case.

On this basis, Apple's Product Ecology model provides another solving idea:

It does not rely on a separate mobile phone product, but with a smart product and software service with headphones, audio and other sets of smart products and software services, it is built to improve the overall influence and profitability of the enterprise.

In a sense, Xiaomi's product ecology, compared to Apple's "Entertainment Full Bucket", the covered life scenario is also more wide, which is the strategic difference between Xiaomi's difference in other mobile phone manufacturers.

Today's millet has long been stripping a single identity of mobile phone brands, and is committed to letting wisdom to penetrate more scenes.

Q3 financial data shows that as of September 30, 2021, the number of small rice Aiot platforms (excluding smartphones, tablets and laptops) broke the first time, 3.33.1% year-on-year; Having five and above to Xiaomi Aiot Platform equipment (excluding smartphones, tablets and laptops) users 8 million, a year-on-year increase of 42.8%. In September 2021, the number of Mijia APP monthly owners increased by 39.0% year-on-year, reaching 59.9 million. Xiai'ai classmates have a monthly monthly household house number of 10.5 billion, an increase of 34.1% year-on-year.

Behind the huge consumer group, for the company, build "product ecology", it is difficult to supply the product itself, but the user's acceptance.

From this perspective, the largest millet, the biggest wealth is not a smartphone throughout the world, but the 5 billion users link in MIUI - this is almost equivalent to one North. Americas or half of Europe's total population.

The Internet business represented by MIUI, Xiaomi has achieved a profit much higher than the hardware manufacturing, while successfully consumed "millet mobile phone - MIUI - AIOT product" consumption closed loop.

It can be said that the millet of the mobile phone brand label is gradually fulfilling the official website, "" The new definition of consumer electronics and intelligent manufacturing companies "in smart phones, intelligent hardware and LOT platforms.Also accompany this definition, it has already rely on growth and profit from growth and profit, and will win a broader prospect in the future capital market.