On March 22, Beijing time, Xiaomi Group-W (01810.HK), which is listed on the Hong Kong Stock Exchange, officially released its 2021 financial report.
The financial report revealed two information that Che Zhijun was concerned about: 1. The progress of the car-making business; 2. The financial situation of Xiaomi Group.
Regarding the progress of the car-making business, Xiaomi's earnings report used "exceeding expectations" once to describe the progress of the smart electric vehicle business since the announcement of the car-making plan in March 2021. Mass production is expected in the first half of 2024.
Regarding the financial situation of Xiaomi Group, the net profit in 2021 was 19.3 billion yuan, down 4.99% from last year, and the adjusted net profit was 22 billion yuan, which was the second best financial report in the 5 years since Xiaomi was listed. Cash and cash equivalents at the end of the period were 23.51 billion, compared to 32.65 billion in the same period last year, down 28% year-on-year.
This is Xiaomi's first financial report since the official announcement of the car in March 2021. Why should we pay so much attention to Xiaomi's financial report, because Lei Jun rejected all investors when officially announcing the construction of cars, saying that Xiaomi would independently invest in car manufacturing.
However, the information outside the financial report may have a greater impact on car manufacturing. Including Xiaomi's stock price falling and falling and breaking again, including the mobile phone business of Xiaomi's basic disk, including the news from competitor Weilai Geely's mobile phone, as well as the rejuvenation of glory.
On the first anniversary of Xiaomi's official announcement, for Xiaomi, what are the changes in itself and the external environment?
01
Thousands of R & D team Q3 sample car
On March 21, the day before Xiaomi's financial report, Luo Baojun, general manager of Xiaomi's Beijing-Tianjin branch, said in an answer to the media that in Q3 2022, Xiaomi Automobile's engineering prototype will meet with everyone and will definitely break everyone's imagination.
From Xiaomi's financial report describing the smart electric vehicle business as "beyond expectations" to Luo Baojun, general manager of Xiaomi's Beijing-Tianjin branch, "breaking through everyone's imagination", it has completely raised the expectations of the outside world for Xiaomi cars.
Xiaomi's financial report also shows that as of now, the scale of Xiaomi's automotive business research and development team has exceeded 1,000 people, and it will continue to expand research and development in core areas such as automatic driving and intelligent cockpit in the future, and it is expected to be officially mass-produced in the first half of 2024.
If the engineering prototype car is produced in Q3 of 2022, then mass production in the first half of 2024 is completely no problem.
But the problem is that from the official announcement of car manufacturing in March 2021, to June 2021, hu Zhengnan, president of Geely Research Institute, joined Xiaomi Automobile with an annual salary of 1 billion yuan, and then in September 2021, Hu Zhengnan joined Shun as an investment partner of Shun capital, and the curve was responsible for Xiaomi car manufacturing.
In just one year, can Xiaomi Auto come up with the product that Luo Baojun said "broke through everyone's imagination". Of course, breaking through everyone's imagination, there is an imagination that breaks through the upper limit and the imagination that breaks through the lower limit, then look at whether Xiaomi Car is a stunning imaginary product that breaks through the upper limit, or a product that breaks through the imagination of the lower limit.
It is worth mentioning that Apple, which holds $250 billion in cash reserves, the car project "Titan" that began in 2014, invested thousands of people in the team, as well as several teams and the change of the main responsible person, was revealed on March 16 that it disbanded the auto team again, and if it is planned to mass-produce in 2025, it will complete the team restructuring within 3-6 months.
Taking Apple cars as a reference, including longer time, more talent, more money, stronger teams, and more self-driving tests, Apple cars are still difficult to produce. What kind of confidence does Xiaomi Car have, can it come up with a product that "breaks everyone's imagination" in Q3 2022?
This is really very confusing.
Of course, luo Baojun can grasp the real situation and progress of how many Xiaomi cars, this is also a problem.
02
Xiaomi mobile phone basic disk strong enemies around
Since the official announcement of the car construction in March 2021, Lei Jun personally led the team to devote himself to the car building, which was regarded by Lei Jun as the last battle of his life.
In the past year, for Xiaomi mobile phones, there are two things that need to be focused on.
1, Geely, Weilai to make mobile phones
In September 2021, Geely signed a strategic cooperation agreement with Wuhan Economic Development Zone to invest 10 billion yuan to enter the mobile phone business. In January 2022, it was reported that Geely was negotiating the acquisition of Meizu mobile phones. In February 2022, it was revealed that Weilai was also conspiring to build mobile phones and was forming a team, according to the news of Che Zhijun, Weilai also intended to learn geely and acquire a mobile phone team and brand.
Xiaomi wants to build cross-border cars, and car companies also want to build mobile phones across borders. Compared with the difficulty of mobile phone manufacturers to the automobile industry, the difficulty of car companies to the mobile phone industry is much smaller, after all, the supply chain of the smart phone industry is too mature, from program design to chip supply, and then to FOUNDC. Network rumors that Weilai mid-range brands to find BYD OEM, perhaps, is Weilai mobile phone to find BYD electronic OEM, after all, BYD electronics is also Huawei and other mobile phone brands OEM.
2. The re-emergence of glory
If geely and Weilai mobile phones are far-sighted for Xiaomi mobile phones, then the re-emergence of glory must be a near-term worry.
Glory, Xiaomi's most familiar opponent. It is also the brand that Huawei used to play millet, after Huawei was sanctioned, Glory sold itself to rebuild the supply chain independently, and Glory mobile phones have once again rejuvenated their youth in the Chinese market. According to the quarterly mobile phone tracking report released by international data company IDC, the top five Chinese smartphone shipments in Q4 2021 are Apple, Honor, Vivo, OPPO and Xiaomi.
Yes, Xiaomi has fallen to fifth in the domestic market. What is more worth mentioning is that in Q4 of 2021, China's mobile phone shipments fell by 3.5% year-on-year, which means that China's mobile phone market is shrinking, and what is more frightening for Xiaomi is that China's market share is declining.
This seems to be a long way from what Lei Jun shouted in August 2021, which has reached the top of the world in three years. Thanks to the outbreak of overseas markets, Xiaomi mobile phone shipments ranked third in the world in 2021, with a market share of 14.1%. However, Xiaomi's sales in overseas markets are even more unable to break through upwards.
It is worth mentioning that OPPO, which once rumored to build a car, has basically given up the idea of building a car after having problems in its own mobile phone business, and the automobile business has maintained a certain forward-looking research. Of course, OV does not have Duan Yongping as the commander, it is difficult to mobilize enough resources to build a car, but Duan Yongping, who has long been far away from industry, is also difficult to swim in muddy waters.
03
The stock price fell and fell, and Xiaomi spent money to buy back
For Xiaomi Group, the mobile phone business is an absolute basic disk, and it is also the confidence of Lei Jun to dare to invest 10 billion US dollars in 10 years and invest 10 billion people to build cars. However, once there is a problem with the basic disk of Xiaomi, for Lei Jun, is it to return to the mobile phone business, or to continue to be in the car business? As for the funds for car manufacturing, it is easy to solve, and financial investors and local governments are willing to contribute.
2021 is the second best financial report in Xiaomi's financial report history, but in the past year, Xiaomi's stock price has fallen and fallen.
The closing price on 22 March 2022 was HK$14.2, down 45.9% from hk$26.25 on 22 March a year ago, and close to the waist, compared with the issue price of HK$17. I don't know whether the investors who once went to Lei Jun's office to scold Lei Jun's shirt to be soaked have cashed out and left, otherwise, Lei Jun's shirt will be soaked again.
In the face of the falling stock price, xiaomi in the 2021 financial report after the announcement, the official announcement of the maximum amount of 10 billion Hong Kong dollars in the open market at an irregular interval, compared to Xiaomi's market value of 350 billion Hong Kong dollars, millet repurchase of shares is not high, but also far lower than Ali's $25 billion to buy back shares, after all, Ali's market value is only 280 billion US dollars.
This also reflects from the side, Xiaomi's cash reserves are inferior to Ali's. However, Xiaomi still has to pay money to maintain the stock price, otherwise, shareholders do not want Xiaomi to build a car. As a listed company, it is indeed very difficult to have a good financial report and expand the business.
Xiaomi Auto, it is better to quickly divest from the listed entity and raise funds independently. Lei Jun, more should find someone to take over the mobile phone business, he can really all in the car business.
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