See this headline, estimated that many people will think I am to black millet, frankly, in many people including the author's view, the value of $40 billion is really not cheap, but does not mean that no investors to pay for it, the mall transaction is so, a willing to play a willing to take, we can think of Xiaomi this financing intention as fishing, May be the bait this is nothing to say, it is not from you and I take the money in the pocket.
Why does Xiaomi dare to mention such a valuation?
Why does Xiaomi dare to mention such a valuation? There are some reasons for this:
1th, there are reports that Xiaomi earlier rejected a $30 billion-worth financing package, in fact, after the completion of a round of financing last August, its valuation has reached $10 billion, more than a year to four times times the value of time, what gave Xiaomi so much confidence? If investors are willing to invest in Xiaomi with a $30 billion valuation, the $40 billion Mithila estimate is also testing the "bottom line" of investors. Because valuations are up to 33.3%, investors who are really bullish on Xiaomi obviously don't care about the money, and it's not hard to accept that Xiaomi was listed on the Chinese Internet table and compared to the market capitalisation of several other giants. For them, it is either more than 33. 3% of the money to take the same shares, either to dig the same money, less to take a bit of shares. But if Xiaomi can really develop according to their expectations, no matter what kind of valuation, the rate of return is leveraged.
2nd, Xiaomi's performance can explain the problem to some extent. Merrill Lynch has reportedly updated a new study, noting that companies such as Xiaomi and Huawei, which have lost money, have now started making profits. As shown, both Huawei and Xiaomi have upstream gross margins this year, and analysts believe Xiaomi's profits could exceed $1 billion this year. If Xiaomi really can make 1 billion dollars a year, then compare 40 billion of the valuation, the price-earnings ratio is 40 times times, it does not seem high ah.
3rd, Xiaomi has a lot of intangible assets, such as the so-called millet ecology, smart hardware, smart home and so on. Not long ago, Xiaomi also released a series of smart home new products, such as small ant intelligent Camera, MI smart sockets, Yeelight smart lights and Millet Intelligent Remote Control center and so on. It is clear that these strategies will have a significant impact on Xiaomi's valuation.
But Xiaomi must be clear that since smartphones have reached a ripe stage, the phone business is not a big boost for Xiaomi valuations. But smart home, wearable devices These "intangible assets" prospects may be relatively broad, and is now in the early stages of development, the millet valuation is a good concept of packaging.
In this way, Xiaomi's 40 billion dollar valuation is still a bit reliable, but the so-called plan has not changed quickly, investors face Xiaomi such a company should be more careful to be good, how to say?
is Xiaomi likely to face a lean situation?
One of the biggest problems with Xiaomi is that in addition to the mobile phone business is cash cow, many other businesses are not yet a new profit support. Xiaomi's hardware quality, production technology and so on are still in the lower level, that is, the brand value of millet will not be because its products sell well to be greatly improved, because the user chose the important reason millet is relatively cheap only.
So if the low-end mobile market competition is increasingly fierce, coupled with increasing market saturation, as well as user replacement of mobile phone frequency decline, how to guarantee the growth rate of millet? In this case, smart hardware, smart home if not become millet and another profit growth point, millet will not fall into the lean situation?
The problem is that even Apple is hard to escape, but Apple has a huge global reach, with a large number of fans, making Apple's new product a curse. And for millet, only by the power of rice noodles, or once again again hunger marketing, can maintain the existing rally? Very doubtful.
Again, smart hardware and smart homes seem promising, but most businesses, including Xiaomi, are still groping and "trying to be wrong". What about Xiaomi's little technical content is not enough for Apple, Google, or even the domestic bat giants, how can it boost valuations? May even become a burden on millet.
Pre-Award for Xiaomi's future performance growth
In my opinion, Xiaomi faces great uncertainty, so it is not very reliable to measure Xiaomi's valuation with concept or income growth rate. Plus Xiaomi is now in the middle of the low-end market and lower prices, and with the expansion of market share, to maintain the trend of income growth, which means that the gross margin may continue to decline, that is, millet income may continue to grow, but the net profit to a certain extent may not rise.
To solve this problem, Xiaomi must speed up the layout of software and services. In the 2014 China Software Hundred Enterprises list, Xiaomi ranked 38, software business annual income of 2.5 billion yuan. This can be a good start, but to get more real money in software and mobile Internet, Xiaomi has to be wary of bat.
In my opinion, bat will become Xiaomi in the field of software and mobile Internet is a stumbling block, on the one hand, bat basically guard the Internet at all important points, other enterprises can only make a little bit; on the other hand, Xiaomi is now trying to build a complete ecosystem through hardware terminals and operating systems. What do you want to do in this eco-system? But Xiaomi must understand that for instant messaging and search for the most basic internet services, even Xiaomi's ecosystem is strong enough to prevent giants such as bat from penetrating, just as Xiaomi cannot prevent its users from using it, so how much business value can such an ecosystem bring to it, You also need to hit a question mark.
But the author of the future of Millet is more confident, the difficulties certainly have, but it is not impossible to solve, so the outside need not to sneer at Xiaomi, even if Microsoft, Google such a world-class giants are afraid to say smooth sailing, not to mention the establishment of a few years of millet. (Wen/Wangyi see qq:543415188)
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Valuation 40 billion, millet willing to fight who would like to be?
