Xiaomi Corporation (1810.HK)

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Since the last post by Cyclone, Xiaomi's price has halved to HKD$9.7.
It is getting more and more interesting to me.
A rare company with deliberately designed low hardware margin business model (less than 1%) and yet still in profit.

Their Smart TV is quite a tremendous feat and now growing fast.
With price of less than S$1K for 65" LED is a sample of their business model.
The quality is to me, not much different to the high-medium end LED.

They have ventured into Aircon as well.
Can't wait to try out if there is opportunity.

The $1T question is:
Can they monetize on their AIOT platform?
I fail to imagine how as of now.
I reckon and hope Lei Jun's imagination is far better than mine.
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4.38bn IPO shs will be unlocked today so you can take your time to find out more Smile
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward

Think Asset-Business-Structure (ABS)
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That is also the reason why I am lurking at the side now.
Watching and trying to collect the crumbs while doing my part on understanding the business model.
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Even though Xiaomi makes mostly consumer products, will there be a possibility that Xiaomi may be targeted by the US, like ZTE, Huawei ? Maybe as part of negotiation for a greater purpose ?

I am also sitting on the side even though personally I quite like some of their products.
"Let all that you do be done in love." 1 Corinthians 16:14
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(09-07-2019, 08:02 PM)dreamybear Wrote: Even though Xiaomi makes mostly consumer products, will there be a possibility that Xiaomi may be targeted by the US, like ZTE, Huawei ? Maybe as part of negotiation for a greater purpose ?

I am also sitting on the side even though personally I quite like some of their products.


I’d say even they‘re really targetted, so what.
This bully may last for how long? Another 5years?
If there‘re good values in the products (which I reckon they are), Times will be on their side!

If you try to beat the waves (customer benefit), the waves win most of the times.



Sent from my iPad using Tapatalk
My views are your Gilbert & Sullivan's:
"The flowers that bloom in the spring, have nothing to do with the case".
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China's Xiaomi plans $1.5 billion buyback to arrest stock tumble

Josh Horwitz
SEPTEMBER 3, 2019 / 10:18 AM

SHANGHAI (Reuters) - Chinese smartphone maker Xiaomi Corp (1810.HK) announced a HK$12 billion ($1.53 billion) share buyback plan on Tuesday, in a reversal of its cash-management strategy that is aimed at boosting its floundering stock.

Xiaomi shares responded to news of the buyback, its biggest, by climbing nearly 7%.

Just last week the company scrapped an already delayed plan to offer equity in China, a move aimed at attracting mainland investors hungry to buy into global companies. The company said then it had enough money and would focus on business development.

Shares of Xiaomi, which listed in Hong Kong last year, have lost nearly a third of their value this year and are at half their initial public offering price, hurt by the company’s sharply slowing growth and increased competition.

The stock has also been hit by losses at the Hong Kong stock market, which has plunged since massive anti-government protests started in the city in June. Companies on the city’s exchange have collectively bled $152 billion in value since June.

“I think it should give investors more confidence to buy the stock because it shows how confident management is in the sustainable cash generating capabilities of the company,” said Morningstar analyst Dan Baker, referring to the buyback.

Baker said the plan to offer shares in the mainland was likely aimed at getting a higher valuation in the Chinese market than it was about raising funds. The buyback announcement shows the company has enough cash, he said.

Xiaomi had cash and cash equivalents of 34.9 billion yuan ($4.92 billion) as of June 30 and total borrowings of 13.8 billion yuan. The company generated positive cash flow of roughly 11 billion yuan in the June quarter.

“The board believes that a share repurchase in the present conditions will demonstrate the company’s confidence in its own business outlook and prospects,” Xiaomi said in a stock exchange filing.

Xiaomi’s current financial resources will enable it to implement the repurchase while maintaining a solid financial position, it said.

COMPETITION

Growth at the Beijing-based company has slowed sharply as the global smartphone market has shrunk and local competition has increased.

Xiaomi’s market share in China declined by a fifth in the April-June quarter even as that of smartphone giant Huawei Technologies surged by 31%, according to research firm Canalys.

More details in https://www.reuters.com/article/us-xiaom...SKCN1VO07R
Specuvestor: Asset - Business - Structure.
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