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Briefing Sep 23, 2020 02:56 pm EqualOcean

Xiaomi to Release Its First '8K + 5G' TV Series

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Oct 19, 2020 02:59 pm · IT Home

Xiaomi's Fintech Arm Rebrands as Airstar Data

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Oct 18, 2020 04:41 pm ·

Xiaomi Bets on Supply Chain Finance, Renames 'Mi Financial' to 'Airstar Digits'

On October 18, 2020, Xiaomi's (01810:HK) financial service segment officially commenced operating under the new name 'Airstar Digits,' where the 'Airstar' comes from its Hong Kong-based virtual bank that launched in June 2020. The financial service specialized entity claims to have three major missions, in which it identifies the target customer groups: serving the financial needs of bricks-and-mortar businesses through fintech, serving financial institutions' industrial up-gradation, and serving for individual consumers. Resembling Ant Group and JD.com (JD:NASDAQ) which have been developing financial services based on their parent companies' established e-commerce ecosystems and user pools, Xiaomi's financial services are destined to build upon its smartphone and IoT products manufacturing and retail process that involves enterprises covering electronic components, smart hardware, logistics and so on. From March 2018, Xiaomi financials claims to provide financial support for over 3,000 bricks-and-mortar businesses with over RMB 90 billion loans, reducing the financing cost of small-to-medium business by approximately 2%. Currently, the Airstar Digits is cooperating with financial institutions to further deliver financial services to enterprises in glass manufacturing, food processing, logistics, and textile industries. Xiaomi's co-founder Hong Feng took the role of Airstar Digit's chairman and CEO. He says the renaming of Xiaomi finance to Airstar shows the company's commitment to empowering Chinese SMBs through digitalized financial services. Correspondingly, the consumer finance app that is operated under Airstar Digits will become Airstar app and continue to deliver loans, investment and insurance services to individual financial service users.

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Oct 15, 2020 12:30 am ·

Xiaomi's Global Wins Render Opportunities for Chinese Outbound App Developers

On October 14, 2020, Xiaomi's (01810:HK) Global Developers Summit is held in Shenzhen, in which the company shares strategy updates and industry trends regarding its Internet services business and related services that will empower app developers to achieve further growth in global markets.  Ranking as the fourth largest smartphone shipper worldwide, Xiaomi's smartphone sales continue to deliver rapid results in its overseas market, especially in the European market during the second quarter of 2020, as the pandemic increased consumers' dependency on mobile devices. The growth of the hardware devices arena is a strong driver for the Internet services penetration in countries that are home to Xiaomi's overseas users. With approximately 70% of the total MIUI (Xiaomi's smartphone operating system) monthly active users from outside mainland China at around 230 million, the company feels the urge to enhance its software services for the overseas user group through developing the software services ecosystem.   Two major factors contribute to the company's overseas software services growth. First, Xiaomi has strong distribution capacity. Xiaomi has a comparatively larger user base of mobile gaming users. By the end of the second quarter of 2020, the daily active gaming user is at around 120 million and daily game installation reaches 8.5 million on an average. Additionally, the company has invested lavishly in game distribution. According to samples shared by one of Xiaomi’s gaming partners, the returns of gaming promotion investment in the overseas market have increased by 90% compared to the number in April 2020. Xiaomi's app store 'GetApps' functions as the traffic portal to the various apps exhibited there. With a combination of Xiaomi’s technological capacity, streamlined operation process and comprehensive developer services, the Xiaomi-affiliated apps are more accessible to users, and consequently further drive the growth and revenue volume.  Second is the company’s platform advantage. Xiaomi meets the growing needs of global developers with marketing services covering a device’s full life cycle leveraging Xiaomi smartphone’s strong growth momentum. With pre-installation and a variety of advertising medias, Xiaomi’s marketing service not only focuses on the growth of installs, but also further helps developers increase the conversion rate and activation rate, providing marketing services to developers with an appetite to expand globally.

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Oct 14, 2020 11:16 am ·

Xiaomi and Huawei Ban Top Mobile Games, Indicating Intensifying Competition

Recently, two famous Chinese phone makers, Xiaomi (1810:HK) and Huawei, announced that they would not allow access to two popular games on their application stores: Genshin Impact and Rise of Kingdoms. The reason is that they could not reach an agreement on revenue distribution with the game publishers. According to the Chinese Apple App Store, Genshin Impact and Rise of Kingdoms’ rank number 3 and 4 on the games list, respectively. Sources released show that Rise of Kingdoms' publisher and developer, Lilith Games, asked for a 70% share of total revenue in recent negotiations with Huawei and Xiaomi. But the two parties split on this issue. Huawei and Xiaomi used to demanding exorbitant prices Unlike a 3 to 7 payment ratio, which is the case between Apple and Epic games, China's gaming distribution channels have strong bargaining power and require more. Big smartphone systems builders like Xiaomi and Huawei ask for 50% of total revenue, topped up by gamers through app stores on the premise of paying off channel fees. In fact, the game developer and publisher can only get less than 50% of the gamers' money contributions. Rewinding the history of the main channels – the smartphone app stores spent several years building their dominant positions. As smartphone shipments rose steeply from 2012 to 2016, the top phone makers in China, including OPPO, Vivo, Huawei, Coolpad and others allied, demanding 50% of the total topline for distribution. At that time, even developers like Tencent (0700:HK) had to accept this rule. The atmosphere has changed as smartphone shipments have declined in recent years. Content providers like Tencent acquired game studios, enhancing their bargaining ability. Tencent's games accounted for 65% of total sector revenue in 2019. As game censorship tightened in recent years, the reduced games supply highlighted the success of Tencent's strategy, which helped Tencent reach a 70% distribution ratio deal on its games such as Crazyracing Kartrider, Jianwang 3 with Huawei and Xiaomi. Another gaming giant, NetEase (NETS:NASDAQ; 9999:HK), claims that it only receives 70% of the total revenue on its two games: Fantasy Westward Journey and Journey to the West. Other phenomenally popular games like Onmyoji couldn't sign such a deal. Alternative distributors are thriving Official app stores, third-party app stores and vertical apps make up the field of gaming distributors in China. Now developers and publishers are cultivating alternative channels: apps like 9Game and Tap Tap, implying that the phone maker alliance is likely crashing. Tap Tap has been a runaway success, turning into a prevalent mobile game sharing community with 4,400 listed games and 7 of them downloaded over 10 million times in 5 years. And 9Game, founded in 2009, a subsidiary of Alibaba, has become the largest Chinese android games distributing platform. These two channels provide mobile gaming news, installation packages, online communities and games ranks. They primarily generate revenue through online advertisements and can return more to the upstream. Analysys, a Chinese research body, said these vertical channels grow faster than hardware channels and third-party players. Besides, alternative media have better stickiness to gamers than other platforms, reflected by their apps' average opening times per day and daily usage. Specifically, apps of vertical channels are clicked 6.35 times per day, compared with 1.94 times for official app stores and 2.24 for third party app stores. What's more, gamers spend 23.89 minutes per day. By contrast, the figures for the other two types of apps are 4.5 and 7.87 minutes, respectively. Large games developers enjoy the fruits The bargaining power between game developers and publishers and distribution channels is decided by how much loss they can afford. The more loss a company can accept, it tends to achieve the dominant position. For example, small gaming studios that generate considerable revenue from a single platform like Huawei or Apple tend to fulfill their requirements. Instead, large gaming companies like Lilith gamers may choose to give up a vital channel like Xiaomi or Huawei while seeking revenue supplements from other media when they choose to suffer the pain. As intensifying competition on downstream, companies like Tencent and NetEase benefit from more choice on selecting partners, grasping more bargaining power.

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Oct 12, 2020 03:21 pm ·

Huawei Tops Hurun Consumer Electronics List, Valued at CNY 1.1 Trillion

As the Hurun list makes clear, in 2020 the most valuable Chinese consumer electronics company is the Shenzhen-based company Huawei, with a CNY 1.1 trillion valuation, followed by Xiaomi (01810:HK) at CNY 434 billion. Huawei's lead in the realm is proved by the 150% advantage in valuation over the second company. Though maintaining its first place, Huawei, which is affected by the US sanctions, is facing considerable difficulties and its valuation fell from CNY 1.2 trillion in 2019 to CNY 1.1 trillion in 2020. The third and fourth positions were taken by vivo and OPPO, which were valued closely at CNY 175 billion and 170 billion, respectively. Another listed smartphone company is Transsion (688036:SH), which ranks sixth with a valuation of CNY 77 billion. Among the top ten consumer electronics companies, five make mobile phones, which in total shipped 620 million smartphones in 2019, accounting for 40% of the world market. DJI, the world's leading drone maker, as one of the world's most valuable unicorns in 2020, ranks the fifth in Hurun's consumer electronics list with a slight decline in valuation at CNY 100 billion due to the shrinking demand during the first half of 2020. The global number one PC maker Lenovo group (00992:HK), which generated the second-largest revenue volume among the 10 Hurun listed companies only following Huawei, ranks the seventh with a valuation of CNY 54 billion. Other Hurun-listed companies are comparably less significant in terms of revenue volume, but are valuable in terms of growth potential and market cap in the stock market. Intretech (002925:SZ), which is specialized in electronics product ODM, and Edifier (002351:SZ), which leads in the hearable market, both saw the market cap surge during 2020. Relx technology, the Shenzhen-based startup, is engaged with electronic cigarettes manufacturing and sales, which is believed by investors to be promising and fast-growing. 

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Oct 4, 2020 01:01 am ·

Xiaomi's Expansion Not Stopped by Lockdowns, Profit Up 29.3% in 1H 2020

Although the COVID-19 pandemic caused strict lockdown measures and the sales were greatly affected in the first six months of 2020, Xiaomi's financial results outperformed the market consensus forecasts. The corporation reported CNY 103.2 billion revenue, representing an increase of 7.9% year-on-year. The profit for the period was approximately CNY 6.65 billion, up 29.3% year-on-year. The share price of Xiaomi rose from HKD 11.22 on January 2 to 19.72 on September 25 this year, which is equivalent to a 75.8% increase in market capitalization.  Despite the impact of the pandemic and global uncertainties in 2020, Xiaomi's diversified business ecosystem has demonstrated its resilience. There are upgrades in almost all sectors. One is the rising return from equity investment in the industry line. Until the end of June, Xiaomi has invested CNY 36.8 billion in more than 300 upstream and downstream companies. The return in 2Q was more than four times the return in 1Q 2020. The operating synergies between Xiaomi and the invested companies are becoming more apparent. Another important change was the 'Smartphone x AIoT' strategy, which was announced by Lei Jun as Xiaomi's core strategy in the next decade to drive synergistic benefits. The peer company Apple reported an 11% increase in revenue (USD 59.7 billion) and a 12.1% increase in net profit (USD 11.25 billion) year-on-year for its third fiscal quarter of 2020. In the same period, Xiaomi made a smaller progression in revenue but created a 129.8% increase in net profit, to CNY 4.49 billion. We can thus see that Xiaomi is far smaller than Apple in market capitalization – but is expanding vigorously.

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Oct 16, 2020 04:15 pm · ITjuzi

Beijing-Based AI Startup Vion Closes Series C Financing

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