Xiaomi’s equity exposure: Lei Jun holds 27% of the shares and completes the share buyback of HK $3.1 billion

0
339

Welcome to follow the wechat subscription number of “creating notes”: sinacchangshiji
Wen / Lei Jianping
Source: Lei Jianping (ID: touchweb)
Report of Lei Jianping on May 14
Xiaomi recently released its annual report for 2019. According to the annual report, Xiaomi’s revenue in 2019 is 205 billion 838 million yuan, an increase of 17.7% compared with the same period of the previous year; its operating profit is 11 billion 700 million yuan, and its profit within the year is 10 billion 100 million yuan.
Xiaomi’s adjusted net profit reached 11.5 billion yuan in 2019, an increase of 34.8% year on year.
In 2019, Xiaomi’s overseas market revenue reached 91.2 billion yuan, an increase of 30.4% year on year. In the fourth quarter of 2019, overseas market revenue reached 26.4 billion yuan, a year-on-year increase of 40.7%, accounting for 46.8% of the total revenue.
Xiaomi’s total revenue in the fourth quarter of 2019 reached 56.5 billion yuan, a year-on-year increase of 27.1%, and adjusted net profit reached 2.3 billion yuan, a year-on-year increase of 26.5%.
In October 2019, Xiaomi’s board of directors announced that since October 25, 2019, Lin bin has been appointed Vice Chairman; Xu Dalai, CEO of Shunwei capital, has resigned as non-executive director and member of the company’s audit committee, mainly for the purpose of focusing on Shunwei capital’s investment and management. Zhou Chengzi, Xiaomi’s senior vice president, has been appointed Executive Director.
At present, Xiaomi’s executive director is Lei Jun, chairman of the board, Lin bin, vice chairman of the board, and Zhou Caizi, senior vice president; Liu Qin, non-executive director; and Chen Dongsheng, Li Jiajie, Wang Shunde, and Tang Weizhang, independent non-executive director.
Chenxing capital’s substantial reduction in 2019
Xiaomi experienced the period of prohibition in 2019. After the semi annual report of Xiaomi in 2019, the Hong Kong Stock Exchange disclosed that Lin bin sold Xiaomi shares for three consecutive days, a total of 41.3072 million shares. In terms of HK $9 per share, Lin bin has cashed out nearly HK $400 million. The move also triggered volatility in Xiaomi’s share price.
Another shareholder with more underweight is Chenxing capital. In early January 2020, according to the documents disclosed by the Hong Kong stock exchange, Xiaomi’s rights and interests of concerted actors represented by Morningside (Morningside capital) changed recently.
Specifically, on January 2, 2020, Chenxing China TMT fund i.lp and Chenxing China TMT fund ii.lp respectively distributed 452 million shares and 75.33 million class B millet shares to their general partners and limited partners, totaling about 527 million shares, involving about HK $5.8 billion.
After the share change, Chenxing held about 1.29 billion shares in Xiaomi, accounting for 5.36% of the total share capital. Compared with December 2019, the subsequent rationable shares decreased significantly, involving HK $5.8 billion.
Before that, on December 12, 2019, Chenxing capital also conducted a large-scale off-site transaction, selling 240 million millet shares, with an average transaction price of 941 yuan and a value of more than 2.2 billion Hong Kong dollars.
Chenxing capital is a venture capital organization that runs with Xiaomi. It invested in Xiaomi in April 2010. Before listing, Xiaomi had 9 rounds of financing, including Chenxing capital, DST global, Qiming venture capital, Shunwei capital, IDG, Hong Kong All Star Investment Fund, Singapore government investment company GIC, etc.
When Xiaomi went public, Chenxing capital sold 627257000 shares, as the largest institutional shareholder of Xiaomi. At that time, Chenxing capital’s reduction was the most controversial, with cash out of over HK $10 billion.
On the eve of IPO, Lei Jun, CEO of Xiaomi, held 31.1296%, which was the major shareholder; Chenxing capital held 17.193%, which was the second largest shareholder, and Lin bin, President of Xiaomi, held 13.3286%, which was the third largest shareholder.
With the re distribution of 527 million shares of Xiaomi to LP by Chenxing capital, Chenxing’s shareholding in Xiaomi dropped to 5.36%, equivalent to more than one year, and the reduction of Xiaomi by more than 10 percentage points, involving tens of billions of Hong Kong dollars. Chenxing capital also lost Xiaomi’s position as the second largest shareholder.
Lei Jun holds about 27% equity
In the year ended December 31, 2019, Xiaomi purchased a total of 338272800 class B shares of the company, with a total consideration (including transaction cost) of about HK $3114 million.
As of December 31, 2019, Lei Jun holds 4254616928 class A shares, accounting for 64.15% of class A shares, and 2406886534 class B shares, accounting for 13.77% of the total class B shares.
Lin bin holds 1411330466 class A shares, accounting for 21.28% of class A shares, 294317837 class B shares through apex star LLC, accounting for 1.68% of class B shares, and 0.04% of class B shares through Bin Lin and Daisy Liu family foundation.
On December 27, 2019, according to the equity disclosure of the Hong Kong stock exchange, Lin bin transferred 4 million shares under apex star LLC to his family non-profit fund account.
This transfer does not involve a change in the number of shares held by Lin bin, and is not a sale of shares. According to Xiaomi, Bin Lin and Daisy Liu family foundation is a non-profit family fund. Its property is used for charity, education, science, literature or religious activities.
As of December 27, 2019, Lin bin holds 2749920210 shares of Xiaomi, accounting for 11.41%.
In addition, Zhou received 44409487 class B shares, accounting for 0.25% of class B shares, and held 0.14% of class B shares through tamarind limited.
As of December 31, 2019, Xiaomi has a total of about 25.15 billion shares, with Lei Jun holding about 27%. Lei Jun also holds 42.07% of Xiaomi financial.

In a letter to investors, Lei Jun said that maintaining high efficiency is the ultimate strategy to overcome the crisis. Xiaomi has been practicing the most rigorous efficiency criterion, which is not only the self pursuit of the ultimate efficiency, but also an objective precaution: to live in the normal winter of the four seasons, then die in winter; to live in the winter attitude, then live in the four seasons.
(statement: This article only represents the author’s point of view, not Sina’s position.)