After 20 months of listing, Xiaomi replaced its CFO: its market value was 300 billion less than Meituan

Finally the dust fell.

In the evening of April 10, Xiaomi Group announced that Xiaomi President Wang Xiang will act as CFO, and Zhou Shouzi, President of International Department, will no longer serve as CFO and will focus on Xiaomi’s overseas market business. This means that after five years in charge of Xiaomi’s financial power, Zhou Shouzi officially stepped down as CFO.

It should be pointed out that Xiaomi does not yet have a suitable candidate for the new CFO. Xiaomi said that the board of directors will continue to select talents from around the world to serve as CFOs.

In fact, Zhou Shouzi is just the “tip of the iceberg” of the big exchange after Xiaomi went public. Prior to this, Li Wanqiang resigned, Lu Weibing, Miao Lei, Chang Cheng, Wang Xiaoyan and others joined one after another, and Xiaomi’s second-generation power core gradually formed. It’s just that such drastic substitutions can hardly conceal Lei Jun’s anxiety.

Lei Jun always believes that Xiaomi is an unprecedented “new species”, but it is still not recognized by the capital market. After 20 months of listing, Xiaomi’s annual revenue exceeded 200 billion, and its profit reached tens of billions, but its market value was far inferior to Meituan-Dianping, which had a profit of less than 5 billion. As of 16:00 on April 13, 2020, Xiaomi’s market value is 243.8 billion Hong Kong dollars, while Meituan Dianping’s total market value is 565.9 billion Hong Kong dollars. In other words, the market value of a Meituan is roughly equivalent to more than two millets.

Xiaomi completely replaced the CFO: “Continue to select outstanding talents on a global scale”

Zhou Shouzi formally and completely put down the financial power of Xiaomi that had been in charge for five years.

Looking around the domestic Internet giants, there is always the help of great people with a Goldman Sachs resume. Ali has Cai Chongxin, who helped Ma Yunli get an investment of 5 million US dollars at the critical moment of Ali’s initial start-up; Tencent also has Liu Chiping, who has helped Tencent’s empire continue to expand through investment.

Coincidentally, Zhou Shouzi also worked at Goldman Sachs. Before going to Harvard Business School to study for an MBA, he was an analyst at Goldman Sachs. Later, looking back on the work experience at Goldman Sachs, Zhou Shouzi once said with emotion, “It lasted for two years and there were basically no weekends.”

After graduating from Harvard Business School, Zhou Shouzi did not choose to return to Goldman Sachs, but joined the DST founded by Yuri Milner, and this work lasted for 5 years. It was this job that created the opportunity for him to join Xiaomi.

Even in the global venture capital circle, DST’s status is still not to be underestimated. This Moscow-based venture capital crocodile has hit Alibaba, JD.com, Didi and Xiaomi and many other benchmarking Internets in China. company. What is less known is that the young and handsome Zhou Shouzi is the real driving force behind this investment.

In 2010, Zhou Shouzi, who was only 27 years old, just joined DST. His mission is to help DST find suitable investment projects in China. In December of the same year, DST founder Yuri Milner met Liu Qiangdong under the arrangement of Zhou Shouzi, and finally reached a cooperation-500 million US dollars investment in Jingdong, accounting for 8.8% of the shares. Many years later, this investment allowed DST to reap a return of 3 billion U.S. dollars.

Still in 2010, Xiaomi, which was founded less than a year ago, has entered Zhou Shouzi’s vision. In order to get in touch with Lei Jun, Zhou Shouzi made a lot of effort-he first met several founders who had been invested by Lei Jun through his own network, and then through the introduction of these founders, he finally succeeded in communicating with him in March 2011. Meet Lei Jun. After nearly half a year of understanding and communication, Zhou Shouzi arranged for the boss of DST and others to visit Xiaomi, and finally contributed to an investment of USD 500 million in Xiaomi.

It was DST Capital’s investment in Xiaomi that allowed Zhou Shouzi to establish a close relationship with Xiaomi. In July 2015, Zhou Shouzi officially joined Xiaomi and served as CFO, becoming Xiaomi’s youngest executive at the time.

After joining Xiaomi, Zhou Shouzi helped small companies improve their financial management and investment teams. In 2018, Xiaomi successfully went public in Hong Kong and became the first listed company on the Hong Kong Stock Exchange with “same shares with different rights”. As the CFO, Zhou Shouzi was of course indispensable.

Until November 2019, Xiaomi announced the adjustment of internal executives: co-founder Lin Bin was appointed as the vice chairman; the original CFO Zhou Shouzi was changed to the president of the international department, and the CFO position was temporarily vacant. Now in less than 5 months, Zhou Shouzi has officially stepped down as CFO, focusing only on Xiaomi’s overseas market business.

At present, the CFO position of Xiaomi is temporarily represented by Wang Xiang, who was promoted to President of Xiaomi Group in November last year. Xiaomi said that the board of directors of the group will continue to select outstanding talents from around the world to serve as CFOs.

The management has changed their blood. Who will leave Xiaomi next?

Xiaomi has passed its tenth anniversary, and Lei Jun is full of emotion.

A week ago, Lei Jun recalled on Weibo that a dozen people were in a small office in the Yingu Building, Zhongguancun, Beijing, and they had a bowl of millet porridge together and started Xiaomi’s business.

Regarding this past event, Lei Jun and other co-founders went abroad to shoot a micro-film about Xiaomi, “Graduation Season 1699”, in which there is a hilarious but passionate clip:

Lei Jun: We got the investment.

Lin Bin: How much is it?

Lei Jun: 100,000 yuan.

Lin Bin: Is it RMB?

Lei Jun: Yes.

Everyone chanted: We can finally make mobile phones.

However, since the listing, the personnel changes of Xiaomi’s management have been very frequent, and it has almost undergone a major exchange in just two years. According to a rough analysis of the investment community, most of the seven co-founders who founded Xiaomi with Lei Jun have either left Xiaomi or retreated to the second line.

Among them, the most sensational was the resignation of Xiaomi co-founder Li Wanqiang in November 2019. Li Wanqiang, called “A Li” by Lei Jun, is one of the core co-founders of Xiaomi. It is said that the famous pot of millet porridge when Xiaomi started its business was cooked by Li Wanqiang’s father at five o’clock in the morning.

From 2010 to 2012, Li Wanqiang was mainly responsible for the overall R&D, design and operation of MIUI. During the period, Li Wanqiang established Xiaomi.com, responsible for the operation, marketing, service, e-commerce, logistics and other businesses of Xiaomi mobile phones. He also created hot words related to Xiaomi including F code, Mi Fan Festival, mobile phone control and so on. It can be said that Li Wanqiang created MIUI and Xiaomi.com. Lei Jun once commented on him, “Xiaomi has been in business for five years, and Ali has successfully pioneered twice.”

What is embarrassing is that with the resignation of Li Wanqiang, at least three entrepreneurial veterans have left Xiaomi.

Zhou Guangping was the latest among the co-founders of Xiaomi to join, but was the earliest to leave. He used to work for Motorola for more than ten years. It is precisely because of his joining that Lei Jun has the confidence to make mobile phones and hardware.

Before Xiaomi went public, Zhou Guangping had already left Xiaomi. Also leaving with Zhou Guangping was another co-founder of Xiaomi, Huang Jiangji. Zhou Guangping had problems with supply chain management, but the two major products of Mi Talk and Xiaomi Router, which were in charge of Huang Jiangji, have never been completed. This is regarded by the outside world as the real reason for their departure.

The co-founder team that is still in Xiaomi has been rarely mentioned. Hong Feng is currently in charge of Xiaomi Finance, which is outside the listed company system. Although Lin Bin and Liu De still work at Xiaomi, they have obviously gradually retreated to the second line. Lin Bin currently serves as the vice chairman and assists Lei Jun in managing the affairs of the board of directors. There is no need to travel back and forth across the country as he used to manage the sales department; Liu De has been appointed as the head of the organization department, responsible for the recruitment, promotion, training and assessment of middle and high-level management cadres Incentives, etc., stay away from the front desk.

Among the remaining millet pioneers, apart from Lei Jun, only Wang Chuan is still in the front line of business. Wang Chuan’s current position is the senior vice president of the group and the president of the major appliances business unit. He is responsible for the business development and team management of major appliances such as air conditioners, refrigerators, washing machines, etc. other than TVs.

Xiaomi has been in business for 10 years, and not everyone can be like Lei Jun, a model worker. After the company went public, many people finally got financial freedom. At this time, it is inevitable that some people will lose the enthusiasm for work in the past. When Li Wanqiang left Xiaomi, Lei Jun once blessed him: “From now on completely let go of myself and enjoy life.”

I just don’t know, who will leave Xiaomi next?

New Game of Thrones: Old opponents in the mobile phone circle have all worked for Lei Jun

But Xiaomi’s country still needs fresh blood to work hard.

In the past two years, Lei Jun has quietly recruited many mobile phone industry leaders to work for him. At the beginning of 2019, Lu Weibing, an “veteran” in the Chinese mobile phone industry, took over the banner of the president of China from Lei Jun.

Lu Weibing was previously President of Gionee Group. After joining Xiaomi, he experienced the adjustment period of Xiaomi’s dual-brand strategy. For more than a year, Lu Weibing has also become more and more valued by Lei Jun because of the considerable sales of many mobile phones in the Redmi product line he is responsible for.

It may be a coincidence that on the same day in 2020, the former vice president of Lenovo Group and the head of mobile phone business joined Xiaomi regularly as the vice president of Xiaomi Group, responsible for mobile phone product planning. Chang Cheng and Xiaomi’s “great grievances” are well-known. At the most intense time, Chang Cheng once “touched porcelain” Xiaomi for four consecutive days. He was the most fierce opponent called Ban Leijun, not one of them.

A day later, Xiaomi announced a new organizational adjustment, and unexpectedly appeared the founder of Xiaojiao Mobile, Wang Xiaoyan, who appointed him as the vice president of China and the general manager of the second sales department and reported to Lu Weibing. Looking back, Xiaojiao and Xiaomi once fought a price war on the cost-effective level, and Wang Xiaoyan can be regarded as the first person to add to the blockage of Lei Jun.

Of course, Xiaomi’s personnel adjustments do not stop there. It is understood that Xiaomi’s newly promoted department general managers are mainly born in the 1980s, with an average age of 38.5 years, indicating that Xiaomi is evolving in the direction of younger cadres and is ready to inherit the talent echelon.

“There is no veteran, no inheritance. No new army, no future.” Lei Jun once said in an internal email that as early as the beginning of 2019, Xiaomi decided to train and promote a large number of young management cadres to build a more dynamic and enterprising team. Front-line command team at all levels. Lei Jun hopes that Xiaomi’s future will be star-studded, and more talents will emerge to make achievements just like the early days of entrepreneurship.

Retirement of founders and replacement of management may be the only way for every large company to grow. The eighteen arhats who founded Alibaba with Ma Yun and the Tencent Five Tigers who founded Tencent with Ma Huateng have gradually retreated from the empire they once built.

Just as the human body’s cells will be replaced once every 7 years, the 10-year-old Xiaomi also urgently needs a blood replacement.

Now, with the departure of Li Wanqiang, Zhou Guangping, Huang Jiangji, Qi Yan and others, it is announced that the first generation of core management of Xiaomi has gradually withdrawn. And Lu Weibing, Miao Lei, Chang Cheng, Wang Xiaoyan and others have joined Xiaomi, which means that Xiaomi’s second-generation leadership team is gradually being formed.

What’s interesting is that Lei Jun’s second-generation power core has almost gathered the former bigwigs of the second-level echelon of the mobile phone circle. I wonder who will be the next “old friend” to join the journey?

After 20 months of listing, why is Xiaomi’s market value 300 billion less than Meituan’s?

In the next ten years, what shortcomings will Xiaomi have to remedy?

This answer may only be found from Xiaomi’s actions. Just as Zhou Shouzi stepped down as CFO, there were rumors in the market that the continued decline in Xiaomi’s stock price after the listing made secondary market investors dissatisfied, and someone was always responsible; however, the investment community also got another voice from within Xiaomi — now it will Half of the overseas business is handed over to Zhou Shouzi, which is an experience for young executives, “it can also be interpreted as a high promotion.”

Regardless of whether this rumor is true or false for the time being, Xiaomi’s market value is indeed an embarrassment in front of us, and it must be far from Lei Jun’s expectations.

In fact, before the IPO, Xiaomi’s internal psychological pricing of the company was between 70 billion and 80 billion U.S. dollars, and even thought that it would have a greater probability of impacting 100 billion U.S. dollars after the listing. However, I did not expect the final listing result to be quite different from the previous valuation.

More cruelly, on the day of Xiaomi’s IPO, Lei Jun still vowed to make Xiaomi’s investors twice as profit. But now more than a year later, Xiaomi’s current stock price is 10.14 Hong Kong dollars, which is far lower than the issue price of 17 Hong Kong dollars per share.

Also listed on the Hong Kong stock market, Xiaomi’s performance is clearly inferior to Meituan-Dianping. Both of these are typical Chinese mobile Internet companies, and they were established almost at the same time: the day after Xiaomi was founded 10 years ago, Wang Xing founded Meituan. Moreover, the two companies were both listed on the Hong Kong stock market in 2018, and they are currently one of the few companies in the Hong Kong stock market that “same shares with different rights”, so they will naturally be compared.

On March 30, Xiaomi released its fourth quarter and full year financial reports for 2019. The financial report shows that Xiaomi’s total revenue for 2019 exceeded 200 billion yuan for the first time, reaching 205.8 billion yuan, and the adjusted annual net profit was 11.5 billion yuan.

On the same day, Meituan Dianping also released its 2019 annual financial report: Last year, Meituan’s revenue was 97.5 billion yuan, a year-on-year increase of 49.5%, and its adjusted net profit reached 4.7 billion yuan.

In contrast, Xiaomi’s revenue last year was 111.05% higher than that of Meituan; not only that, Xiaomi’s profit of tens of billions of yuan was several times that of Meituan. However, in terms of market value, Meituan Dianping currently has 565.981 billion Hong Kong dollars and Xiaomi has 243.864 billion Hong Kong dollars. Meituan is 2.32 times that of Xiaomi.

Why is there such a big difference?

The most common view is that although Meituan has only achieved profitability for the first time in 2019, as a pure Internet company, as its scale expands, it can be foreseen that its profitability will increase in the future.

On the other hand, Xiaomi still finds it difficult to get rid of its position as a “hardware company”. Xiaomi’s Internet service is the key to Lei Jun’s belief that Xiaomi should be “Tencent X Apple”, but the performance has always been mediocre. Although Lei Jun has always emphasized that Xiaomi is a “all-round and comprehensive new species company”, it is clear that the market has not bought it yet.

No way, Lei Jun can only start from drastically changing players, looking for a new way out.

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