Written by / Chen Chang
Edited by / Tian Yanlin
Now, who wants to tear off the "Xiaomi label"?
Maybe! Not long ago, Chengdu Fun Sleep Technology Co., Ltd. (hereinafter referred to as "Fun Sleep Technology"), invested by Lei Jun, the founder of Xiaomi Group, also let the outside world see more hidden worries behind the company's listing after being inquired twice by the CSRC.
As an Internet retail company focusing on its own brand of scientific and technological innovation home products, Fun Sleep Technology was established in 2014 and is a very optimistic enterprise that Lei Jun is very optimistic about being included in the "Xiaomi Ecological Chain". The company even attracted well-known basketball player Yi Jianlian to endorse its products. In the last round of Pre-IPO of Fun Sleep Technology, Yi Jianlian also subscribed 60,000 yuan and suddenly entered the shares.
However, such a company, which has been blessed by capital and has a star aura on its head, has received two inquiry letters from the CSRC after it first submitted the GEM prospectus at the end of 2021.
"Finance world" weekly learned that the CSRC focused on questioning the degree of dependence of fun sleep technology business on Xiaomi Group, and whether there are related party transactions and profit transmission between the two. On December 8, 2021, after being inquired for the first time by the CSRC, Fun Sleep Technology made a reply on January 24 this year. Just five days later, the second inquiry came again, and the regulatory authorities asked more carefully about the exchanges between Fun Sleep Technology and Xiaomi.
But this time, Fun Sleep Technology is dumb and has not yet replied.
Fun Sleep Technology is not the first "Xiaomi ecological chain" company to encounter listing problems. Previously, Shangmi Technology, which does POS machines and face payments, terminated the review of the IPO of the science and technology innovation board; Yilai Intelligence, which does home lighting, took the initiative to withdraw the prospectus; Sushi Technology, which makes toothbrushes, is currently in the stage of being inquired.
Recently, the market rumors regulatory authorities have checked the current projects involving the xiaomi industry chain on the science and technology innovation board and the ChiNext board, and the IPO policy involving the millet industry chain is restricted. However, on March 29, the CSRC made it clear that "I will not issue IPO restrictive policies for enterprises related to the millet industry chain, nor have I carried out special investigations." ”
After the rumors were clarified, the outside world wondered why, backed by lei jun's "big tree", the listing of Fun Sleep Technology is still fateful? Being given the title of "Xiaomi Ecological Chain", is it the aura or shackles of the enterprise?
Judging from the development of those "millet" companies that were successfully "fed" and listed by Lei Jun, the current No. 9 company, Stone Technology, and Huami Technology have all invariably moved towards the road of "de-milletization".
(Photo/ CSRC official website)
Revenue depends on millet, and investment in scientific and technological research and development is low
The SFC's two inquiries are not without reason.
According to the prospectus, during the reporting period from 2018 to June 2021, the main business income of Fun Sleep Technology from selling goods to Xiaomi Group or realizing on its operating platform accounted for 80.33%, 75.69%, 68.43% and 65.37% of the main business income of the current period, respectively. That is to say, most of the company's main business income relies on Xiaomi Group, which is very dangerous for a company that is preparing to go public.
Therefore, in the first inquiry letter, the CSRC specifically listed a "dependence on xiaomi group", so that fun sleep technology based on facts, indicating that the company has been using xiaomi channels as the main sales channel, expanding third-party online platforms and unrelated sales channels.
Fun Sleep Technology replied that in the early stage of the company's development, it mainly deepened the millet mall and the millet product channel, and achieved good business results. In addition to the Xiaomi channel, it has gradually opened stores on platforms such as JD.com, Alibaba, Suning, Pinduoduo, Gome, Youzan, and Dewu, and there are no relevant obstacles in expanding third-party online platforms and unrelated sales channels.
The prospectus shows that Fun Sleep Technology products are mainly sold through the Internet platform, and during the reporting period, the company's online channel sales accounted for more than 97%, and offline channel sales accounted for a relatively small proportion. The online channels mainly refer to Xiaomi Youpin, Xiaomi Mall, Jingdong Mall and Fun Sleep official website.
Fun Sleep Technology also admitted that at this stage, the company mainly operates on the Xiaomi series platform, relatively single, "If the stability of Xiaomi's own operation or business model and management policies change in the future, the company cannot make adjustments in time, which may adversely affect performance." ”
However, this response did not solve the CSRC's questions about the company's dependence on Xiaomi and whether the two sides had interests in conveying.
In the second inquiry, the CSRC said that the related party of Xiaomi Group, Shunwei Investment and Tianjin Jinmi Investment, invested in the issuer, and the company used the Xiaomi e-commerce platform as the main sales channel, and required the company to explain whether there were special treatment or preferential treatment in the sales, promotion, rebate and other aspects of the Xiaomi platform, and whether there were differences in the company's sales policies on the main e-commerce sales platform.
However, in the face of the second questioning of the CSRC, Fun Sleep Technology has not yet made a reply.
However, Fun Sleep Technology has revealed that in order to reduce related party transactions, it reduced sales to Xiaomi Group and expanded other sales channels during the reporting period, and since 2019, Xiaomi Mall has also reduced the purchase of non-Mijia series products. According to the prospectus, in 2020, the sales revenue of Fun Sleep Technology was 479 million yuan, a year-on-year decrease of 73 million yuan, of which the sales revenue to Xiaomi Mall decreased by 45.05 million yuan year-on-year.
Despite this, in addition to sales exports, Xiaomi Group is still the top five suppliers of Fun Sleep Technology in 2020. This means that the raw materials of Fun Sleep Technology come from Xiaomi, and after the product is produced, it is then sold by Xiaomi. Between one buy and one sale, Fun Sleep Technology only played a transit role, and the market speculated that there was likely to be a profit transmission behavior between the two sides.
What makes the CSRC even more confused is that Fun Sleep Technology claims that its main business is the research and development, design, production and sales of household products such as easy-to-install furniture and home textiles, but the prospectus also says that "all products adopt outsourced production methods", which seems to be somewhat contradictory.
(Photo/ Fun Sleep Technology Prospectus)
Moreover, although Fun Sleep Technology claims to be doing product research and development, from 2018 to 2020, the company's research and development expenses were 5.3353 million yuan, 6.3092 million yuan and 6.1486 million yuan, accounting for only 1.11%, 1.14% and 1.28% of the operating income; and as of the end of June 2021, the total number of R& D personnel of the company was 34, accounting for 25.37% of the total number of employees.
It is worth mentioning that this 34-person R&D team has obtained 174 patents with only about 1% of the R&D investment, including 129 utility model patents and 45 design patents.
"Finance and Economics" Weekly flipped through its specific patent names, the latest updated items in the list are sleep detectors (pebbles), rock slab drawer coffee tables, multi-functional portable neck pillows, spine spring latex mattresses, chairs, none of which are invention patents.
At the beginning of this year, the 8H space resin energy ball mattress released by Fun Sleep Technology invited Yi Jianlian to endorse. However, how much technology content this mattress that costs more than 5,000 yuan is also one of the focal points of external controversy.
Xiaomi ecological chain listing dilemma
Since 2020, a number of companies related to Lei Jun and Xiaomi Group have collectively not been on the road to IPO.
Before Fun Sleep Technology, in early March this year, after accepting two regulatory inquiries and replies, Xiaomi Technology, in which Xiaomi Group's company participated, finally withdrew the listing application documents, and the IPO of the Science and Technology Innovation Board was terminated.
Shangmi Technology is a pos machine, code scanning gun, face payment and so on. According to the financial report, from 2018 to 2020, the company's three-year cumulative loss was nearly 300 million yuan. Since the first prospectus was submitted in June 2021, the Shanghai Stock Exchange has focused on its science and technology attributes.
In July 2021, Xiaomi's customized smart lighting product supplier "Yilai Intelligence" also chose to terminate the IPO half a year after the IPO application of the ChiNext Board was accepted. In two rounds of inquiries, the Shanghai Stock Exchange also questioned its "cooperation with Xiaomi" and "business independence" issues.
Founded in 2012, Yilai Intelligent is positioned in intelligent hardware and became a member of the "Xiaomi Ecological Chain Enterprise" in 2014. The company has no self-built production plant, the production mode is like Fun Sleep Technology, all entrusted to external processing, the chip is still purchased from Xiaomi related parties. The company's main business income has 15 inventions, of which 10 are shared with Xiaomi. During the reporting period, the sales revenue of the company's Mijia brand products accounted for more than 50% of the total revenue, higher than the sales of Yilai Intelligent's own brand products.
After submitting the prospectus, Sushi Technology, which was crowned by the media as the "first stock of electric toothbrushes", is also worried about the listing results in the face of the failure of the "predecessors".
Founded in 2016, Sushi Technology's main products are electric toothbrushes, toothbrushes, electric shavers, hair dryers and so on. Xiaomi Group, as the company's second largest shareholder, has a total of 19.47% of the shares.
Similar to the above-mentioned "Xiaomi ecological chain" companies, Xiaomi Group is also the largest customer of Sushi Technology. At the same time, Sushi Technology's R&D investment is less than a quarter of its sales investment. In 2020, the company's sales investment was 261 million yuan, and the corresponding research and development investment was only 45.9308 million yuan. According to this point of view, there is also great uncertainty in the listing of Sushi Technology.
Is the "Xiaomi" label easy to get rid of?
If these companies waiting to be listed are headaches for the "millet" label attached to them, then the "millet" companies that have successfully landed on the capital market have gradually realized that the relationship with millet is not necessarily a good thing.
Relying on the "support" of Xiaomi Group for a long time and accepting many help from Xiaomi's funds, design, supply chain, sales and so on, these listed companies have also paid a certain price in recent years.
In February 2020, Stone Technology, known as "Sweeping Mao", successfully landed on the Science and Technology Innovation Board with the hidden danger of high dependence on Xiaomi Group. Before the listing, the comprehensive gross profit margin of Stone Technology was 32.5%, which was basically at the bottom level in the same industry. In order to get rid of the dilemma of low profits, the company accelerated the pace of "de-milletization" after listing. In the first half of 2021, Stone Technology's private label sales accounted for more than 98%, and the comprehensive gross profit margin also increased to 51.32%.
Although these listed companies began to "escape" from Xiaomi, the label of "Xiaomi" is not easy to get rid of. Stone Technology's previous dependence on millet still produced sequelae. In 2021, the company's net profit attributable to the mother was 1.402 billion yuan, an increase of only 2.4% year-on-year, and the growth rate of revenue and net profit declined relative to before the listing, and the market value of the higher point evaporated by more than 63 billion yuan.
At the same time, Xiaomi is also quietly cashing out and saying goodbye to these listed "brothers". Some time ago, Lei Jun and a number of executives reduced the market value of Stone Technology by nearly 5 billion yuan. Earlier, Xiaomi Group and Sequoia Capital had cashed out 5.825 billion yuan from the "electric balance car leader" No. 9 Company.
In the eyes of the outside world, Lei Jun has taken advantage of its early platform to expand large-scale in the field of low-end consumer goods for a long time, using capital advantages to invest in nearly 400 companies. Although Xiaomi does not hold a stake, these so-called technology companies lack technical content, and most of the companies rely on the Xiaomi platform for revenue. Xiaomi cashed out after these companies went public.
It is not difficult to restore the logic in it. For startups, holding xiaomi's "thighs" allows performance to grow rapidly, so as to achieve the purpose of listing. But does this approach really seem sensible now?
Caijing Tianxia Weekly consulted with Zhang Shengli, a lawyer at Beijing Yunting Law Firm who is familiar with the listing rules. In his view, the ecological chain companies of large enterprises will have more problems such as dependence on large customers and frequent related party transactions than general IPO companies, and under the condition of full disclosure, whether such enterprises can be recognized by the market still needs to be tested.
What needs to be more vigilant is that if the startups on the "Xiaomi ecological chain" cannot be transformed in time, it is likely that there will be a situation of "one prosperity and one loss".