328.3 billion, 22 billion, 190 million ... A series of figures have made the world's rice noodles boil again.
On March 22, Xiaomi Group, with consumer electronics and intelligent manufacturing as the core, released the Q4 and annual performance report of fiscal 2021: in 2021, Xiaomi's total revenue reached 328.3 billion yuan, an increase of 33.5% year-on-year; adjusted net profit reached 22 billion yuan, an increase of 69.5% year-on-year, and net profit hit a record high.
As a big blue chip in Hong Kong stock technology, this beautiful financial report stimulated the confidence of market investors in Xiaomi, and after the release of the financial report, Xiaomi's stock price rose by more than 9% at one point.
The stock price of the capital market has risen sharply, which proves that Xiaomi's financial report is not ordinary.
In this excellent financial report, Xiaomi's core and basic mobile phone business continued its excellent performance in the past, with annual smartphone shipments of 190 million units, an increase of 30.0% year-on-year, ranking third in the global market; AIoT business grew steadily, and the interconnection ability was further strengthened; the new business Internet revenue Q4 also hit a record high, and the ecological vitality was significantly enhanced.
It should be known that in the past year, the industry has peaked and economic fluctuations, as well as the lack of cores, etc., the smart phone and Internet industries are facing severe tests. Under the headwind of tight supply chain and weak demand, whether it is Xiaomi's financial data or product performance, it has reached a new high, and its ability to resist risks has increased significantly, showing full resilience.
Since Xiaomi proposed the high-end strategy in 2020, Xiaomi has comprehensively benchmarked Apple, and at the high-end strategy seminar at the beginning of this year, Lei Jun announced the goal of xiaomi's high-end - to take the first place in the market share of domestic high-end mobile phones within three years.
Judging from the financial report released, the competitiveness of high-end products has been improved again, the AIoT ecology has been strengthened, and the combat effectiveness of Xiaomi has been continuously improved. With the continuous increase of investment in scientific and technological research and development, the strength of Xiaomi can play is getting stronger and stronger, and Lei Jun's strategy of benchmarking Apple is becoming more and more confident.
Where is the growing combat effectiveness?
Xiaomi's adjusted net profit in 2021 reached 22 billion yuan, an increase of 69.5% year-on-year. In 2019 and 2020, xiaomi's adjusted net profit growth rate was 34.8% and 12.8%, respectively. It can be clearly seen that Xiaomi's performance has returned to the high-speed growth track again.
Behind the rapid growth is the support of xiaomi's hard power with "mobile phone xAIoT" as the core and soft power based on Internet services. Soft and hard power continues to grow, becoming Xiaomi's long-term "fighting" combat effectiveness.
In terms of hard power, it is very different from Apple, Huawei, etc. when they started with mobile phones, and the importance of mobile phone business to Xiaomi is known all over the world, which is the basic disk of Xiaomi.
Throughout 2021, Xiaomi's mobile phone business grew steadily and became an important engine for Xiaomi's growth. In the whole year, Xiaomi's mobile phone business achieved operating income of 208.9 billion yuan, an increase of 37.2% year-on-year. One of the bright spots in the sharp increase in mobile phone business revenue is the increase in volume and price.
In terms of shipments, Xiaomi smartphone shipments and market share hit a record high, with annual shipments reaching 190 million units, up 30% year-on-year. Canalys data shows that xiaomi smartphone shipments rank third in the world in 2021, with a market share of 14.1%.
In terms of price, high-end brands have achieved both domestic and foreign blossoms.
Xiaomi's global shipments of high-end smartphones priced at 3,000 yuan or more in Chinese mainland and 300 euros or more overseas have exceeded 24 million units, doubling from last year.
Among them, the shipment of high-end smartphones priced at 300 euros or more abroad increased by more than 160% year-on-year. Canalys data shows that Xiaomi ranks third in the overseas high-end smartphone market with a retail price of $350 or more in 2021. High-end brand strategy, Xiaomi continues to promote, has achieved phased results.
The mobile phone business shines brightly, driving the growth of AIoT products.
In the whole year of 2021, Xiaomi's AIoT business achieved revenue of 85 billion yuan, an increase of 26.1% year-on-year. As of December 31, 2021, Xiaomi's AIoT connected devices reached 434 million pieces, an increase of 33.6% year-on-year; Xiaoai's monthly active users increased by 23.3% year-on-year, reaching 107 million Mijia App's monthly active users, an increase of 42.0% year-on-year to 63.9 million.
In the AIoT product matrix, Xiaomi's smart TV shipments reached 12.3 million units throughout the year, and the shipment volume has ranked first in China and the top five in the world for three consecutive years.
It is worth noting that among AIoT products, Xiaomi has disclosed for the first time in a rare and exclusive case of products other than smart TVs. Among them, Xiaomi's global smart air conditioner shipments exceeded 2 million units, an increase of more than 70% year-on-year. Smart major appliances (air conditioners, refrigerators, washing machines) lead the market, with revenue growth of more than 60% year-on-year in 2021.
The diversified product matrix has been deeply cultivated and developed, and the moat ecology of Xiaomi has been gradually strengthened, which proves the correctness and potential of Xiaomi's "mobile phone xAIoT" business model.
Hard power has laid a solid foundation, and soft power has brought new profit power to Xiaomi.
In 2021, Xiaomi's Internet service revenue reached 28.2 billion yuan, an increase of 18.8% year-on-year. Among them, overseas Internet revenue reached 5 billion yuan, an increase of 84.3% year-on-year.
In the Internet business, Xiaomi's annual advertising revenue reached 18.1 billion yuan, an increase of 42.3% year-on-year. The growth of advertising revenue proves the success of Xiaomi's high-end strategy.
Xiaomi's high-end smart product shipments continue to grow, and Xiaomi's users are also growing, especially high-net-worth users, which means that Xiaomi's commercialization ability is getting stronger and stronger.
Under the highly saturated market, Xiaomi's Internet business has maintained healthy growth, showing the strong growth of Xiaomi's Internet ecology.
In addition, Xiaomi has also created a future combat force - smart cars. New energy is the trend of the future, as a third space outside the home and work, the future transformation of the car has a huge imagination space, smart cars are "legs of the super mobile phone", and is a scene richer "mobile phone".
Up to now, the R&D team of Xiaomi's automotive business 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 is expected to be officially mass-produced in the first half of 2024.
In the research report released by Southwest Securities, it was pointed out that Xiaomi's EV new business has built a long-term blueprint. Smart cars will become another continuously growing combat force for Xiaomi in the future.
From mobile phones to AIoT, to Internet services, to smart cars, Xiaomi has both soft and hard, and its strength to play has continued to grow, not only maintaining the steady growth of Xiaomi's performance at present, but also depicting the future value vector for it.
Revaluing the value of Xiaomi
Excellent enterprises must be long-termists, the so-called long-termists, that is, based on the present, look at the long-term situation, and adhere to the right things for a long time.
"5G+AI+Iot is the next generation of super Internet." This is the next judgment of Lei Jun, the helmsman of Xiaomi, to the industry, and it is also the strategic definition given by Lei Jun to Xiaomi.
For smart phones, the market has a consensus: the ceiling of the mobile phone market will come, and it will be the competition of stock.
Data released by IDC shows that global smartphone shipments have been negative for 4 consecutive years since reaching a high point in 2016, and even if shipments rebound in 2021, the year-on-year increase is less than 5%, and the compound annual growth rate of the next two years is expected to be only about 3%-4%.
The Internet of Things is the trend of the future, and the development of AIoT is still continuing, far from reaching the ceiling. According to the data in the "2021 Global AIoT Developer Ecosystem White Paper", the global AIoT market size reached 226.4 billion US dollars in 2019, and it is expected to reach 482 billion US dollars by 2022 with a growth rate of 28.65%.
As an early entrant, Xiaomi has been laying out AIoT since 2013 and has always been consistent. Xiaomi's IoT strategy has also been continuously upgraded, from "mobile phone + AIoT" to "mobile phone xAIoT".
A small symbol change is the upgrade and transformation of Xiaomi's ecological concept of the Internet of Things.
The era of "+" is the combination of Xiaomi products and products, while the era of "x" is the ecology of Xiaomi's multi-service category aggregation. In this process, smart products empower each other to form an ecological closed loop and win the favor of the market.
From 2019 to 2021, in the past three years, the number of devices connected by Xiaomi AIoT was 235 million units, 325 million units and 434 million units, respectively, with a growth rate of 38% and 33%, respectively, maintaining a growth rate of about 30%. According to this growth rate, in 2022, Xiaomi AIoT will connect more than 500 million devices.
From 2019 to 2021, the number of users with five or more connected devices to The Xiaomi AIoT platform was 4.1 million, 6.2 million and 8.8 million, respectively; from 2019 to 2021, Xiaomi's global MIUI monthly active users increased from 300 million to 510 million, and the global net new MIUI monthly active users reached 113 million in 2021.
All this proves the popularity of Xiaomi's smart product ecosystem in the market, and Xiaomi is already the world's largest consumer AIoT Internet of Things platform company.
Unfortunately, however, the response of the capital market is not enthusiastic. Since its listing in 2018, Xiaomi has experienced great ups and downs, with a total market value of HK$368.7 billion (about 300.527 billion yuan).
The root cause is that the market's valuation logic for Xiaomi is still stuck in the template of the former "hardware company". In the recent past, the low performance of Chinese stocks and the international environment have triggered a decline in Hong Kong-related companies, which in turn affected the downward shift of the valuation center.
At present, Xiaomi's price-earnings ratio is 15.59 times, and in the capital market, the price-earnings ratio of hardware companies is about 10-20 times, which coincides with Xiaomi's current price-earnings ratio.
However, with the growth of Xiaomi's Internet business and the gradual maturity of the AIoT Internet of Everything ecosystem, the continuous growth of Xiaomi's hard and soft power, the valuation logic of the past may be a bit outdated for Xiaomi.
From the perspective of Apple, a world-renowned Internet technology company, Apple has created a "product ecology" model: not relying on iPhone products alone, but building a high user stickiness product chain with the help of headphones, audio and other sets of smart products and software services, thereby improving the overall influence and profitability of the enterprise.
Apple's current market capitalization is $2.7 trillion, with a price-to-earnings ratio of 27.62 times.
In contrast, Xiaomi's AIoT Internet of Everything ecology covers a wider range of life scenarios than Apple's "entertainment family barrel". Moreover, compared with Apple, Xiaomi also has a mass market that Apple does not have.
The products that Xiaomi has made include two lines, the mass brand and the high-end market. When the high-end market meets the needs of high-net-worth users, the public brand looks at 80% of the needs of 80% of users, 80% of users mean that they will be closer to consumers, and 80% of the needs mean that they are closer to the needs of consumers.
Looking at the market, not all people have the ability to buy Apple's products, xiaomi's cost performance, can meet the needs of consumers, making millet more consumer attributes.
Compared with Apple, Xiaomi has a higher growth rate, so Lei Jun is not talking about apples, but reasonable.
In addition, all Internet technology companies have a consensus that the future competition is scientific and technological strength. Whether it is the growth of Internet business or the reinforcement of the moat ecology, xiaomi needs to increase investment in scientific research.
"Technology-oriented" is one of Xiaomi's three iron laws, in 2021, Xiaomi's R & D investment reached 13.2 billion yuan, an increase of 42.3% year-on-year. Throughout the 5 years from 2017 to 2021, xiaomi's R&D investment compound growth rate reached 43%. Lei Jun also said that in the next five years, it will continue to increase investment in research and development, and it is expected to exceed 100 billion yuan.
At the top of scientific and technological research and development are scientific and technological talents. For talent, Xiaomi is extremely eager. It is understood that Xiaomi has set up a million dollar annual technology award to reward scientific and technological innovation, which has been selected for 3 consecutive years, reflecting Xiaomi's emphasis on talent and scientific and technological innovation.
With some investment, Xiaomi's scientific research achievements have also appeared frequently. It is understood that Xiaomi 12Pro is equipped with Xiaomi's self-developed professional image chip "Surging C1" and charging chip "Surging P1", which greatly improves the performance of the mobile phone; MIUI13 realizes the system-level full-link anti-fraud function, and the Xiaomi Mi 12 series has also become the industry's first high-end flagship with anti-fraud function.
The continuous reinforcement of the "AIoT" ecology and the continuous increase of scientific research investment provide Xiaomi with highly competitive growth in the future.
After the release of the financial report, Xiaomi Group announced that it would buy back in the open market for HK$10 billion. The buyback is not only the confidence that Xiaomi gives to market investors, but also the firmness of Xiaomi for future growth.
A soft and hard power, extremely effective millet, with the value continues to be recognized by the market, its future will have greater room for growth, such millet is worth a "value revaluation"!