Tim Culpan, columnist at Bloomberg joined us to discuss the recent Xiaomi IPO and what it means for Chinese technology companies going public. Tim offered his analyses on Xiaomi and break down their media narrative versus what they are really are and where their core businesses and revenue models are structured. Last but not least, Tim discussed how the Chinese companies such as Xiaomi, Baidu and Alibaba might move with the Chinese government’s scheme of Chinese depositary receipts (CDRs).
Here are the interesting show notes and links to the discussion (with time-stamps included):
- Tim Culpan (@tculpan, Linkedin, Bloomberg), Columnist at Bloomberg [0:18]
- Since our last conversation, what have you been up to? [0:35]
- Tim’s recent conversations at RISE Conference and TechSauce conference [1:10]
- Xiaomi IPO [3:08]
- Context: Our discussion on Xiaomi’s progress was based on their performance in the first week after their IPO.
- Let’s start with an introduction of the company although we have covered this company many times on the show. Can you give an introduction to Xiaomi and what the company does? [3:21]
- Oftentimes, I have difficulty in understanding Xiaomi’s business models, because sometimes, they are the Apple of China and then another time, Amazon of China, and of course, with their physical stores, you can call them Muji of China, what are the business models that define this company? [6:51]
- Is Xiaomi a hardware company or software & services company today? [7:43]
- The best is to start with understanding Xiaomi’s business, in your view, what are their core businesses and how have they fared so far before IPO? [9:38]
- Xiaomi was in the spotlight in 2015 with their smartphone success and subsequently started plunging down with their smartphone market share being usurped by Huawei and Oppo/Vivo, are they going to profitable or not in the coming years after the IPO? [11:08]
- You have floated 8 charts to explain Xiaomi and their legendary founder, Lei Jun, and what interesting conclusions you can draw from them? [15:11]
- Can you elaborate on the idea of Chinese depositary receipts or otherwise known as CDRs and it appears that other major tech companies in China such as Baidu are considering doing this? [17:45]
- Xiaomi made a great return with their investment on Midea, and what is that about and what does it say about Xiaomi in general? [21:13]
- Do you see Xiaomi becoming a SoftBank with the founder who started off as a super angel and now a corporate VC thru his own company? [22:50]
- What are the sentiments of the investors towards Xiaomi’s IPO? (Reference: Xiaomi has China’s moms and pops paying Lei June by Tim). Xiaomi has launched their IPO on Hong Kong Stock Exchange 9 July 2018, so how did they fare from their initial launch? (Reference: Millions of Xiaomi Shares may be under water from Day One by Tim) [24:25]
- Where do you see the future of Xiaomi? What are the critical success factors they need to win over investors in the public markets? [27:14]
- Closing [31:30]
- Google Play
- Overcast FM
The show is hosted by Bernard Leong (@bernardleong & weibo) and are sponsored by Ideal Workspace (Twitter, Facebook and LinkedIn) with their new Altizen Desk (Twitter, Facebook, Medium). Sound credits for the intro music: Taro Iwashiro, “The Beginning” from Red Cliff Soundtrack.