Written by / Zeng Guang
Editor / Dong Yuqing
Glory draws attention again
Because of a rumor of allotment shares, Glory has once again attracted public attention in recent days.
Recently, netizens who are certified as glory employees posted on the pulse that glory requires employees to buy shares in the company, various departments have allocation indicators, and even employees are asked by supervisors to take out loans to buy, and employees who do not buy may be required to leave.
Rumors are growing. On April 3, Honor officially responded that the rumor was false news, there was no forced purchase of shares, and all employees were voluntary. For the news of "not telling the purchase price", "compulsory purchase" and "leaving without buying", Glory said that they were all rumors.
A glory employee told the "Finance world" weekly that his department did not have a compulsory purchase, but only issued an explanatory document for the equity subscription, "The leader said it, not as the rumors said." ”
The employee speculated, "Maybe the radicals in some departments will say that the loan should also be bought, and then you pass me and I pass you, which changes the taste, and it becomes a rumor that the online compulsory loan is bought, and if it is not bought, it will be fired." ”
Glory also said in response to the media "Finance Eleven" that Glory did open up the opportunity to employees to allocate shares, and would not force purchases, but would encourage and guide. In the response, Finance Eleven mentioned that "employees who refuse to allotment may face pressure from leaders, but they will not be dismissed." ”
According to the "Finance world" weekly from internal employees, the low yield may be the reason for the low willingness of Honor employees to buy shares. An employee told the "Finance World" weekly that the income of Glory shares is currently tentatively set at 2%.
The above-mentioned employees also mentioned to the "Finance world" weekly that the employees were a little disappointed after reading the documents, and compared with the initial expectations, the final income gap was a bit large. "Low income is definitely not willing to buy, everyone is here to make money, not to help the boss realize his dreams."
Photo/Visual China
Usually, unlisted companies will allocate corresponding virtual shares to employees to motivate employees. For example, Huawei's shareholding system began as early as the 1990s. At that time, Huawei was in a difficult situation, so the management decided to issue virtual shares to employees instead of payroll. Of course, the stock is not granted in vain, employees need to buy it at their own expense, and at the same time, it is centrally managed by the union, which is essentially a fund-raising for the business activities of the enterprise.
In this way, Huawei's 1 yuan 1 share system continued until 2001, and the internal shares held by employees began to be gradually replaced by virtual shares. According to the information disclosed online, Caijing Tianxia Weekly once estimated that in the past 10 years, Huawei's total dividend was about 240 billion yuan.
A management analyst told Caijing Tianxia weekly that Huawei's dividend is the key to stabilizing the military's morale. Huawei, who is in a difficult situation, can survive firmly, which is entirely based on the unremitting struggle of Huawei people, and the root of this struggle is also derived from the top-level design of this team motivation.
Therefore, when Glory also had a similar situation, Glory's internal employees also had high hopes for it, and did not think that the terms were not satisfactory.
As for the actual price of the rights issue, the employee said it was inconvenient to disclose. However, according to some Glory employees on social platforms, the Glory allotment was carried out according to the valuation of 280 billion yuan, but the valuation has not yet been officially confirmed by Glory.
In fact, since independence in November 2020, Honor has repeatedly rumored the possibility of listing. Although considering the rapid growth of Honor in the second half of 2021, this valuation is still at a high level in terms of Honor's current shipment volume. According to IDC data, the domestic shipments of Honor mobile phones in 2021 will be 38.6 million units, ranking fifth in China, while in overseas markets, Honor mobile phones in 2021 are still in the starting stage and have not yet entered the top five in the world.
In contrast, in the whole year of 2021, Xiaomi's global shipments of smartphones were 191 million units, which was nearly 5 times the domestic shipments of Glory in the same period, ranking third in the world after Samsung and Apple. According to Canalys data, xiaomi shipments in the fourth quarter of 2021 ranked third in the world, with a market share of 12.5%, and Xiaomi officially disclosed that its mobile phone shipments in the fourth quarter were 44.1 million units, exceeding the annual shipments of honor mobile phones in the domestic market.
From the perspective of volume, Honor's current shipments still have a big gap with Xiaomi, but the valuation is close to Xiaomi's current market value. As of the close of trading on April 8, Xiaomi Group's market capitalization was HK$328.7 billion. After its listing in 2018, Xiaomi's share price has been lower than the issue price of HK$17 for a long time, closing at HK$13.16 on April 8.
If you want to surpass Apple, win Xiaomi first
In 2022, domestic mobile phone manufacturers are already benchmarking Apple. At the Honor Magic 4 series conference on March 17, Honor CEO Zhao Ming said that Honor wants to change the current situation of Apple's dominance, and Magic 4 will also fully benchmark Apple. "We will definitely make consumers feel more than Apple."
After the release of the Honor Magic 4 series, Zhao Ming also revealed recently that after the launch of the Honor Magic 4 Standard Edition, 60% of the purchase users came from Apple and Huawei. He said Honor was "very excited" about the results within the group.
After a rapid rebound in the second half of 2021, Honor has become the second largest mobile phone manufacturer in China, Counterpoint data shows that the glory market share in the fourth quarter of last year was 17%, second only to Apple, ranking first in the domestic mobile phone camp, and the flagship series Honor 50 series and Honor 60 series released last year were welcomed offline.
In addition to the rapid growth of shipments and benefiting from Huawei's brand dividend, Honor mobile phones have also done a better job in high-end. Canalys analyst Zhu Jiahan told Caijing Tianxia Weekly that among the major manufacturers, The ASP (average selling price) of Glory last year was higher in the domestic camp. However, compared with apple and Huawei's ASP, there is still a big gap between glory and glory.
However, behind this achievement is still indispensable to the dividends of the Huawei brand. Although Honor's current shipments are growing rapidly, the current glory high-end flagship design is still somewhat similar to the Main Flagship of China. For example, the Honor Magic3/4 series is very similar to the Huawei Mate40 series.
With the gradual fading of Huawei's brand dividend, in addition to benchmarking Apple, Honor also needs to establish its own brand language and design language in the future. In the overall saturated or even shrinking smartphone market, Honor needs to further prove its product capabilities in the future.
In addition, after Honor's independence, its overseas markets are still in its infancy, which has a certain impact on the growth of Honor's global shipments. Overseas markets have now become the front line of competition for domestic mobile phone manufacturers, Xiaomi's overseas shipments in 2021 will exceed 50%, and OPPO and vivo have also grown rapidly in overseas markets in the past two years.
On October 12, 2021, Honor's official Twitter post said that the Honor 50 series will be equipped with Google Services (GMS), and honor mobile phones will officially return to overseas markets. According to Canalys analyst Zhu Jiatao revealed to caijing weekly, Honor has successively entered Overseas markets such as Colombia, Peru and Mexico in Latin America, Saudi Arabia and the United Arab Emirates in the Middle East, Egypt and South Africa in Africa, and Eastern Europe since Q4 of 2021.
Even with the recent release of the Honor Magic 4 series, Honor, like Huawei at that time, chose to start in Barcelona overseas and then released it at home, which reflects Honor's determination to restart overseas markets. Honor CEO Zhao Ming said at the press conference on March 17 that it will restart many overseas markets such as Europe, the Middle East and Africa.
However, the performance of Honor in overseas markets still needs time to be verified. According to the news revealed by Canalys to the "Finance world" weekly, due to the restart of overseas markets and the small number of models, Glory has not started rapidly in the overseas market in the short term.
"Because the reconstruction and recovery of channels, and the recovery of operators and retailers, it takes a certain amount of time." Canalys analyst Zhu Jiahan analyzed the weekly magazine "Finance world".
At the same time, since entering 2022, the domestic mobile phone market is facing a rapid contraction. According to data from the China Academy of Information and Communications Technology, domestic mobile phone shipments in February 2022 were 14.9 million units, down 31.7% year-on-year, and the total shipments in January and February were 47.9 million units, down 22.6% year-on-year.
Tianfeng International analyst Guo Mingji recently said on Twitter that China's major Android mobile phone brands have cut about 170 million orders this year, accounting for 20% of the original planned shipments in 2022. Kuo also mentioned that due to low consumer confidence, orders may be reduced again in the coming months.
Affected by the overall weak demand in the mobile phone market, the price of honor mobile phones is not strong, and there are still price reductions and sales offline from time to time. A glory dealer told the "Finance World" weekly that Glory's latest release of the Magic4 series can be discounted by 300 yuan to 400 yuan in the dealer's store. The model was officially released at the MWC World Communications Conference in Barcelona on February 28 and officially released in China on March 17, which is a high-end flagship mobile phone with a price of 4,000 yuan for Honor, which has been listed in China for less than a month.
However, in the downturn of the market, Glory is already a manufacturer with a better survival situation in China, in February 2022, in the case of other domestic smartphone sales all the way down, Honor is the only positive growth brand, with sales of 3.9 million units, up 141.6% year-on-year.
A former owner of a Xiaomi authorized store told Caijing Tianxia Weekly that a single brand can no longer support the operation of physical stores, and his store has now been changed into a comprehensive storefront, and now it is also selling glory goods.
However, the rapid growth of Honor last year may not be sustainable for a long time, with the rapid recovery of Honor's market share and the fading of Huawei's brand dividend, its market share is now close to when it was a sub-brand of Huawei, and there is not much room for market increment.
Canalys believes that Honor's market share in 2022 should no longer have the same high-speed growth as in 2021, and it may be a slow growth process. Because the competitive landscape of the Chinese market is relatively stable, the market share of each company will gradually stabilize.
For Glory, regardless of whether it is listed in the future, its shipments need to be taken to a higher level in order to support a valuation of nearly 300 billion yuan. This may require Honor to catch up with its old rival Xiaomi in terms of shipments before benchmarking Apple.