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Hello Beautiful people! It's that time again for another awesome IPO article! Right now, as I write this, we are driving down from Sequoia National Park with Jerremy, his nephew and niece, and his nephews girlfriend. What an incredible trip! Here are some pictures!
This IPO article, whew. Where do I start? This company is one that I am pumped to talk to you about and actually one I just recently put some money in to! It’s cheap, Chinese, and I can see a lot of growth potential in my opinion. That company is Xiaomi, ticker XIACY (and XIACF, but this ticker charges much more in commissions so don’t use it!)
It all started with a scooter. Our crew was walking around the streets of Nashville during a festival when I noticed tons of those ‘Bird’ and ‘Lime’ scooters either being ridden or parked on the side of the road. If you live in or frequent a big city then you know what these are. They look like this.
I have seen them in San Diego before, but they seem to have just made their way to Nashville! They work like this: You download the app on your phone and input your credit card information, find one of the scooters, scan it’s barcode/QR code, and it will grant you access to rent the scooter. From there have fun! Super easy and a great way for quick transit around a city! After playing on one myself, I started looking into how much they costed (as I really want one now), and then tumbled into the rabbit hole of who actually makes the scooters for these particular companies. After some quick googling, I found that Bird, the brand I have seen more of, uses Xiaomi brand scooters. Xiaomi, which is traded on the stock market and just recently IPO’d! So I decided to write you a quick article to talk about them! Because we are all up for a little learning!
Xiaomi was founded in April of 2010 and is a Chinese Electronics manufacturer. They specialize in everything from Smartphones, TV’s, speakers, wearables, apps, smartphones, and of course the infamous Scooters. In fact, Xiaomi is currently the world’s 4th largest manufacturer of Smartphones (Q2 of 2018). As mentioned before it is based in Beijing, China and has over 15,000 employees based all over including China, Malaysia, Singapore, Indonesia, the Philippines, and South Africa!
Here’s a nifty picture of one of their stores in China! Reminds me a bit of an Apple store!
Companies like this are easy when it comes to how they make money: by selling their products. And with a portfolio of products as large as theirs is, they have many ways to do that. By it's most recent count XIACY's revenue was 45.24 billion yuan ($6.60 billion), 6.06 billion more than was expected. This was a 68.3 percent year-on-year rise. There was also a "Net profit of 14.63 billion yuan, from a loss of 7.03 billion yuan in the first quarter of 2018." Right now Xiaomi focuses mostly on handhelds, with about 70% of their revenue coming from Smartphones. To keep up with other companies, XIACY will need to increase revenues on avenues like their apps and other internet services as handhelds, in general, are starting to stagnate and decline.
Right now XIACY's major competitors include other smartphone/electronics companies like Oppo, Huawei, and Vivo. These makers offer high quality devices at very low prices and could be intense competitors to keep at bay if they want to retain that top spot. Oppo is specifically known for producing high end, new technology filled smartphones that top the charts consistently. While Oppo does have other products, they seem to be phone-centric. Huawei, again is very similar to the above two, but takes it a step further by including networking and telecommunications equipment. On an even cooler note, it is the largest telecommunications equipment manufacturer in the world! Right now I have this to say; all three of these companies have a lot to offer. They each seem to have their own "edge" and I can see a lot of potential growth in all of them!
Xiaomi IPO'd on August 23rd and has done nothing but go down since then. My play on XIACY is this: whatever I put in will be my risk. And I will try to acquire my shares as low as I can. Here is a chart of it's current setup. Remember, trade when you are uncomfortable, not when it feels good. As noted above, I'll only be investing a small amount, expecting it to 'go to zero' which is doubtful, but if it does, I'll lose very small R's.
That's about it for me! With the sheer amount of these scooters popping up in cities all over the place, it seems to me a no brainer that it's stock will start to reflect these partnerships in the future. Xiaomi as of May reportedly locked in a contract of 10's of millions of dollars with Xiaomi as it's major vendors. Not to mention Spin, a competitor of Bird and Lime, also uses the Xiaomi brand scooters. Think outside the box in your trading! You are amazing!
Keep smiling :)
P.S. Remember the XIACY! Check with your broker if you plan on trading this one, as the commissions for OTC stocks can be different than you normal trading!
- Ashley
“Not only do self-love and love of others go hand in hand but ultimately they are indistinguishable.” ― M. Scott Peck