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Will the future of Cloud Mi Technology be smooth after the US stock listing?
At 9:30 p.m. on September 25, Beijing time, Xiaomi Ecological Chain Company Yunmi Technology was successfully listed on NASDAQ with the stock code of "VIOT", which was the second company listed in the United States by Xiaomi Ecological Chain six months after Huami Technology was listed. The opening price of Yunmi Technology on the first day was $9.50, up 5.56% from the issuance price of $9. By the end of the day, the stock price had risen 0.89% to close at $9.08, with a market value of about $630 million. Today, the second day of listing, the share price dropped 8.59% and the stock price broke to close at 8.30 dollars, with a market value of about 580 million dollars.
Net profit of revenue increased continuously
As an important part of Xiaomi's ecological chain, Yunmi Technology, which started with water purifier, was founded in May 2014 and headquartered in Shunde District, Foshan City, Guangdong Province. It has only been four years since its inception. Its main direction is to apply Internet and AI technology to household appliances. Its main products include Xiaomi water purifier, Yunmi super energy water purifier, Yunmi super energy water filter Xiaomi TDS detection pen and other products.
Since 2016, Yunmi Technology has begun to focus on household appliances from the small household appliances field, and has rapidly expanded its layout. It has successively launched a series of products, such as dishwashers, range hoods, gas stoves, refrigerators, washing machines, water heaters, etc., claiming to build a whole house of Internet appliances. According to the previous prospectus of Xiaomi Port Exchange, as of Q1 2018, the number of ecological chain enterprises (including intelligent hardware and consumer products) under Xiaomi has reached more than 90.
According to the public information, in July 2014, Yunmi Technology obtained Xiaomi's angel round investment and became a Xiaomi ecological chain enterprise; In January 2015, Yunmi Technology completed the A round of financing, with investors including Shunwei Capital, Sequoia Capital, Chenxing Capital, and GIC Singapore Government Investment Company, amounting to tens of millions of yuan. According to the prospectus of Yunmi Technology, the net revenue of Yunmi Technology in 2017 was 873 million yuan, an increase of 179.4% compared with 312 million yuan in 2016. As of June 30, 2018, the net revenue of Yunmi Technology was 1.04 billion yuan, an increase of 284.4% compared with 270.6 million yuan in the same period of 2017; At the same time, during the reporting period of 2016, 2017 and the first half of 2018, the net profits of Yunmi Technology were 16.259 million yuan, 93.24 million yuan and 70.291 million yuan respectively, achieving continuous profits and rapid growth.
The proportion of R&D is declining
In terms of equity structure, according to the prospectus, Chen Xiaoping, founder and CEO of Yunmi, is the largest shareholder with 71.6364 million shares, accounting for 41.3%. The second largest shareholder is Shunwei Capital, jointly owned by Xiaomi founders Lei Jun and Xu Dalai, with a shareholding ratio of 20.5%. The third largest shareholder is Red Better Limited, a wholly-owned subsidiary of Xiaomi, with 33.8182 million shares, accounting for 19.5%. In general, Lei Junxi holds 40% of the shares of Yunmi Technology. The company expects that after the IPO, Chen Xiaoping's shareholding will increase to 42.5%, while Lei Junxi's shareholding will decrease to about 33%.
In fact, most of the revenue of Yunmi Technology has always come from Xiaomi. In 2016, 2017 and the first half of 2018, the revenue of products sold by Yunmi Technology to Xiaomi Company was 299.8 million yuan, 739.5 million yuan and 651.5 million yuan, respectively, accounting for 95.9%, 84.7% and 62.6% of its total revenue in the same period, with the proportion declining year by year. In the prospectus, Yunmi Technology also said, "In terms of brand, a large part of our historical revenue comes from Xiaomi brand products, especially the intelligent water purification system of Xiaomi brand. We sell Xiaomi brand products directly to Xiaomi, and Xiaomi sells these products to consumers through retail channels. In recent years, we have vigorously promoted the sales of Yunmi brand products through the development of new products and the introduction of new product categories. "
When it comes to new product development, it is natural that we cannot do without the strong investment in R&D, but what is interesting is that the proportion of R&D expenses of cloud rice technology has been declining. According to its prospectus, from 2016 to 2017 and the first half of 2018, the R&D expenses of Yunmi Technology were 29.926 million yuan, 60.749 million yuan and 49.047 million yuan, respectively, accounting for 9.6%, 7% and 4.7% of the operating revenue.
In sharp contrast to the decline in R&D expenses, its sales expenses are rising in a straight line. According to the prospectus, the company's sales and marketing expenses were 20.929 million yuan, 95.296 million yuan and 146.589 million yuan, respectively, accounting for 6.7%, 10.9% and 14.1% of the operating income. This kind of cloud rice technology inevitably makes people doubt that it is just telling false stories to consumers and playing the so-called "marketing card". This also seems to be different from the positioning of Yunmi Technology, which claims that it is a "full house Internet appliance enterprise focusing on the R&D, manufacturing and sales of smart appliances".
The prospect of household appliances with insufficient innovation is worrying
From the emergence of water purifiers in the industry to today's large-scale involvement in the field of everyone's electricity and the inability of R&D to keep pace, Yunmi Technology has been trying to promote the popularization of many of its smart home appliances in the market with cost performance ratio, which is also the consistent routine mode of Xiaomi, but the effect seems not obvious. Lack of brand influence and channel advantages, lack of user trust as the foundation, and lack of innovative and outstanding differentiated products. Only relying on low prices, Yunmi Technology is obviously difficult to open up the situation in the home appliance market, especially in the large home appliance market.
What's more, since the launch of the products of Yunmi Technology, the industry has constantly raised questions about its product imitation and plagiarism: the products of Yunmi refrigerators are highly similar to those of Haier and other home appliance giants, while the products of Yunmi range hoods, gas stoves and other products are more similar to those of Fangtai and other kitchen appliance giants; What's more embarrassing is that in March this year, the Yunmi dishwasher was removed from the shelves by the Shanghai Pudong New Area Intellectual Property Office after it was exposed that it was suspected of infringing several patents of the United States, including appearance design and utility model patents.
On the other hand, the prospectus shows that the operating cash flow of Yunmi Technology in 2016 was 15.49 million yuan, basically equal to the net profit of 16.25 million yuan; In 2017, the operating cash flow of Yunmi Technology was 123.9 million yuan, higher than the net profit of 93.24 million yuan, which is an ideal situation. However, in the first half of 2018, when the net profit was 70.29 million yuan, its operating cash flow was a net outflow, and the net profit cash flow fell from 133% to - 25%. In this regard, some insiders said that Yunmi Technology's net profit cash content fell precipitously without major adjustments in its business scope, which means that Yunmi Technology may become a money burning company from a money making company, and its own hematopoietic capacity has seriously deteriorated. If it is not listed, its company operation will face great challenges. For this reason, some people also said that the IPO of Yunmi Technology in the United States was a helpless move, in order to fundamentally get rid of the dependence on Xiaomi with the help of listed financing.
Chen Xiaoping said, "The listing is an important milestone of Yunmi, hoping to improve the brand of Yunmi and become the pioneer of the whole house Internet home appliances; secondly, we will use this to develop more products, more home Internet solutions, and redefine intelligent life." Now, the home appliance industry has become a red sea. The high growth period has passed, and the imagination space is limited, This year, affected by the general environment, it has entered a new round of cold winter. In the fierce market competition, the oligopoly leadership has also taken shape, whether in household appliances, kitchen appliances or small household appliances. It is not clear whether the listed Yunmi Technology can continue to make breakthroughs and live out its own brilliance in the fierce struggle of many Xiaomi ecological chain enterprises, but in the household appliance industry of the "Red Sea" market, Yunmi Technology still has a long way to go. (Jia Qiong) The opinion of this article only represents the author himself. If the source of the article is a network reprint, this website is an information publishing platform. If there is infringement, please contact this website to delete it in time.
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