Since December, Lei Jun, chairman of Xiaomi Group, has retired as the legal representative, chairman and executive director of a number of Xiaomi affiliated companies, involving related enterprises including Guangzhou Xiaomi Communication Technology Co., Ltd., Guangdong Xiaomi Technology Co., Ltd., xiaomi technology (Wuhan) Co., Ltd. and so on. The series of actions took place in mid-November, after Xiaomi Motors was controlled by its Hong Kong company, Xiaomi EV Limited, and Lei Jun became the executive director of Xiaomi Motors. Affected by this news, millet stock prices fluctuated sideways after a slight decline during the period, indicating the wait-and-see mood of investors.
According to the Weibo response of Wang Hua, general manager of the public relations department of Xiaomi Group, "Lei's energy this year is mainly focused on causing related matters, and executives can already share some of the relevant work and responsibilities", at the Xiaomi investor meeting on October 19, Chairman Lei Jun also said that the progress of Xiaomi car manufacturing and team work has far exceeded expectations... This information has shown that the work of Xiaomi car construction has accelerated.
Is it a two-line car?
In addition to Xiaomi Auto, which was established on September 1, 2021, Zhimi Technology, an ecological chain company controlled by Xiaomi, is also a member of the car-making army, and its legal representative, Xiaomi co-founder Liu De, accounts for 95% of the shares. In April 2015, Zhimi Technology completed a Series A financing, jointly invested by Shunwei Capital, GGV and Morningside, and in April 2016, after the completion of the Series B financing by GIC Singapore Government Investment Corporation, Zhimi Technology was valued at US$1 billion that year.
When asked whether Xiaomi Automobile and Zhimi Technology are xiaomi group's two-line car-making plan, Wang Hua once replied, "Xiaomi does not have a two-line car-making plan. Zhimi is a Xiaomi ecological chain enterprise, and Xiaomi Group will not directly participate in Zhimi's strategic decision-making. Zhimi Company, out of interest in researching electric vehicles, formed a small team and was doing very early work. It is understood that the car construction direction of Zhimi Technology is passenger cars, and the first model will launch an SUV.
Why Hong Kong?
Tracing the fermentation point of this incident, it is not difficult to find that the shareholders of Xiaomi Automobile have changed, from the original Xiaomi Communication Technology Co., Ltd. to Xiaomi Hong Kong Company Xiaomi EV Limited. So why Hong Kong? Now as Hong Kong, Macao and Taiwan enterprises have no tax avoidance and preferential factors, the only reasonable explanation is the subsequent more convenient IPO listing - although There is Lei Jun's previous investment commitment of 10 billion US dollars in 10 years, this amount of money is far from enough for the electric vehicle industry that has become a money-burning game (as shown in the figure below: 2011~2020 Disclosure of financing amounts TOP10 new energy vehicle brands).
According to historical financial report data, with the 3% investment of Xiaomi Group in research and development expenses compared with the investment of not less than 10% stipulated in Huawei's "Basic Law", Xiaomi Group has successively developed surging and pinecone series chips since 2017, and has not driven any Xiaomi high-end mobile phones to become explosive, and the importance of capital investment for products can be seen. Therefore, Xiaomi Automobile's choice of Hong Kong should be based on the successful experience of Xiaomi Group's listing on the Hong Kong Stock Exchange in 2018, and more consideration is given to: First, the environment and process of subsequent IPO listing operations are more familiar; second, because Hong Kong, as a world-renowned financial center, has great attraction to global capital.