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Strong Performance by Xiaomi Ignored by the Market
March 25, 2019
 
Xiaomi, reported better-than-expected quarterly profit– but its shares continue to trail most Chinese stocks’ stellar 2019. When Xiaomi listed on the Hong Kong stock exchange last year, one of its aims was world domination – and it’s wasted no time in achieving exactly that. In 2018 its smartphone shipments were up 122.6m up 33.6% in a flat to down market. Sales outside of China more than doubled last year and now represent 40% of the company’s total revenue. In Western Europe, Xiaomi shipped over 400% more smartphones in 2018 than in 2017, becoming the region’s number four brand.  The US might be next up, although Xiaomi hasn’t announced a game plan yet. With Chinese rival Huawei bossing it at home but under greater scrutiny abroad, Xiaomi could find customers where Huawei can’t. In an initial public offering, existing shareholders typically commit to staying invested for a certain period of time (a.k.a. a “lockup”). Some of Xiaomi’s investors weren’t allowed to sell their stock until January. That means there were likely more sellers around than there’d normally have been – potentially preventing Xiaomi from enjoying the stock price rises seen by other Chinese companies following better-than-expected economic data and tax cutannouncements. Xiaomi’s market debut was a damp squib, and its share price has declined since; but for early investors who paid as little as 0.25¢ per share in 2010 and 2011, selling in January would still have netted a cool 57,000% profit. 

From Finimize