Producer Meg 2： In the international market, I don’t know that Jason Wu is not responsible.

2025年2月4日 | admin | finance

Wen | Yi Qing

Editor | Chen Meixi

Halfway through the summer vacation, the national total box office has exceeded 8 billion.

The film industry has not been so lively for a long time. In the first half, "Disappeared She" constantly attracted the audience into the cinema in the marketing of marriage and love anxiety, creating a box office score of over 3.5 billion, breaking the cumulative box office record of China film history crime films; In the second half, Wu Ershan appeared in the cinema with the epic masterpiece Feng Shen, the pink world created by Barbie made efforts to break through in the summer file, and YiBo continued to expand his box office appeal with Passion.

In addition, "In an octagonal cage" and "Three Wan Li in Chang ‘an" are the objects of public discussion. Myths, women, dancing, crime, reality, animation, adventure and other stories are all gathered in this summer, and the topics, discussions and box office trends are snowballing.

Megalodon 2: Abyss, as a deep-sea adventure monster blockbuster controlled by China producers, will also become a unique existence, and is expected to drive the market in the second half of the summer file.

On the one hand, as a series, what kind of collision Meg 2 can bring after the actor’s upgrade makes the audience curious.

On the other hand, Jason Wu, the box office leader, undoubtedly raised the audience’s expectations for this film-what kind of box office miracle can Jason Wu bring to Meg 2 after Wolf Warriors 2 and Wandering Earth 2?

On the morning of July 28th, with these questions, Hedgehog Commune met two producers in Meg 2, Lorenzo di Bonaventura and Belle Avery, and discussed with them their views on Jason Wu, the difficulties in co-producing projects at home and abroad, and the changes in genre films.

Bella output a lot of information at the scene, and sincerely said: "I believe that filmmakers in the world will pay more and more attention to the China market, and I have been working on other projects. If they can all perform well in the China market, it will be a very good thing for me."

Jason Wu, first choice.

In 2018, The Meg was released in the cinema, and Li Bingbing, a China actress, became one of the highlights of the film in the China market, and finally accumulated a box office of 1.053 billion.

After a lapse of five years, in order to realize the cast of tough guys, the focus shifted to Jason Wu. The producer chose Jason Wu without hesitation, even willing to wait for him for two years.

In the live conversation with the producer, "Jason Wu" was frequently mentioned, and it is not difficult to see that the production team attached importance to Jason Wu from the whole production process. Meg 2 always revolves around the role of "Nine styles" played by Jason Wu in the aspects of script, role creation and cultural differences.

Bella mentioned, "Scripts (in Hollywood) usually take eight months to a year, but the role played by Jason Wu is very crucial. As a new character, we need to consider what is the relationship between him and every character in the first film. In order to better present the role and integrate China culture, the script has been polished for a long time. "

Lorenzo already has the production experience of Bumblebee, Transformers: The Rise of the Super Warrior and other works. In a large number of reading films, he has also seen the Wolf Warriors series starring Jason Wu. Wolf Warriors 2’s box office achievement of 5.694 billion in China market is the first time to reach the top 100 box offices in the world, leaving a deep impression on the international market. "If any filmmaker doesn’t know about Jason Wu, they haven’t done their duty."

Since then, Lorenzo has been paying attention to Jason Wu’s career. His relaxed performance in front of the screen, sometimes humorous and sometimes tough, has also become the reason why Meg 2 chose him. After the first film, the second film needs a China role to lead the show, and it forms a sharp collision with another Hollywood starring Jason Statham. Jason Wu, who is good at action movies and always surprises the audience, is the only choice.

The producer knew that Jason Wu couldn’t make an appointment, so he took the script to fight for it first. Bella still remembers seeing Jason Wu for the first time in England. At that time, in a small room, they sat on the sofa with a script and exchanged roles with him. Jason Wu left a deep impression on her.

In front of the screen, his action plays always attract people’s attention. In reality, Jason Wu is cheerful and enthusiastic, treats everyone to eat hot pot in a very authentic China way, and easily handles this role invitation at the dinner table.

Even though it was difficult to make an appointment in Jason Wu, the team still waited for two years. The film has not been officially released, but what the two producers saw and heard during the filming made them feel that the wait was extremely worthwhile.

As a Chinese-foreign co-production project, Meg 2 has gathered actors from all continents, which is a unique cross-cultural communication exhibition. Recalling the first meeting scene, Bella strengthened her choice of Jason Wu-he can bring more elements that China audiences like.

Indeed, Meg 2’s Chinese, the crowning touch, has become a joke that is more acceptable to China audiences in the film. At the scene, as long as Jason Wu speaks Chinese, there will be laughter all around.

The lines such as "Shut your mouth" and "Dare you slow down a bit?" were improvisations by Jason Wu. Foreign staff couldn’t understand them, so he explained to everyone, "He said you have to believe me, and the China audience will understand this point." Bella finally respected Jason Wu’s decision, "because he knew the China audience."

On the occasion of the strike of foreign actors’ unions, China hosted the only world premiere of Meg 2, and "Jason Wu" became the biggest "killer" for the film to seek high box office.

China’s Narration in the Deep Sea Monster Film

As a series of films, if we want to continue to meet the audience’s expectations of the film, we should not only keep the wonderful part of the first film, but also give the second film a sense of freshness.

Lorenzo thought about this problem from the beginning. If we continue to use the interaction of "male and female collocation", it will be difficult to distinguish it from the first film and give the audience a refreshing feeling. Therefore, telling stories from a different perspective, increasing the number of megalodon sharks and developing monster species seem to be the simplest and straightforward choices.

Based on the first film, Meg 2 is more complete in deep-sea thriller, character relationship and story line, and is close to China culture.

Megalodon 1 has the cool feeling of a monster film, but the character line is relatively simple, and human exploration of the underwater world is limited, which has been improved in the second part. "The relationship between the positive protagonist teams is closer than before." Lorenzo said.

Taking the character "Jiuao" as an example, Yu Baimei revealed during the road show that Jiuao’s original name was "Zhang Jian", but it was changed to "Jiuao" because of his father’s dream and based on China culture. The relationship between Jiuao and his father and his family was fully explained in the second part.

In western films, the creators usually ignore the oriental proposition of "Where do the characters come from?", while Meg 2 makes full connections according to the thinking logic of China people.

In the film, Jonas Taylor, played by Jason Statham, is a western father, while Jiuao, played by Jason Wu, is a typical uncle from the East. The relationship between them and their younger generation Mei Ying is ostensibly due to their personality, but in fact it is a collision between the East and the West in intergenerational relations.

"Jonas, Jiuao and Meiying get along very subtly. All foreign masters can understand the interaction between Jonas and Meiying, but not everyone can understand the interaction between Jiuao and Meiying. If we don’t have a partner from China, there is no way to express this subtlety accurately." Lorenzo said.

Bella told Hedgehog Commune with some excitement that the visual effects department had produced more special effects of creatures and sharks. This international cooperation has also made her know more about China culture. "With this relationship, we can understand Jiuao. For me, this is an attempt in the relationship between people. People in different cultural backgrounds have different reactions to death and dreams, which is more touching to me. “

The creative team tried to start with the relationship between the characters, which not only made the team more capable of fighting, but also made the audience in the cinema more empathetic with the characters in the monster film, and even increased the appeal to the female audience. "I think women should be excited when they see the interesting scene of two men with babies!" Bella said with emotion.

Lorenzo hopes that in this deep-sea monster film, the roles of different countries can establish different ways of connection, but it can also convey the unified emotional value and heroic narrative of human beings. "This is the preference of the global audience."

Although cultural differences always exist, which once became a challenge in the filming process, Meg 2 prefers to find commonalities in the differences, just like Lorenzo’s original intention of making a film: we want to emphasize in this film how people from different cultures and ethnic groups can establish better ties.

How to go further with genre films?

Lorenzo and Bella prefer to call the "difficulties" they encounter "challenges". Therefore, in the filming process of Meg 2, the difficulties are not mentioned, but the challenges are always there.

The number of teams is huge, and different teams in different countries have different understandings of the same problem. In the process of discussion, Lorenzo found that everyone’s contradiction lies in the degree of application of film elements. "For example, how many times do octopus appear in the film, how to present their appearance, is it the tip of the iceberg or unveiling the mysterious veil? Everyone’s starting point is good. This is not so much a difficulty as a challenge of teamwork. "

Bella was more worried about the scene when shooting. Meg 2’s underwater shooting is almost composed of special effects. The actors wear heavy costumes to perform without real scenes. She is worried about the state of the actors and the effect of filming. "We want to create a new species of octopus and make different productions for each Megalodon shark to distinguish it. These details are complicated."

But in the end, when all the elements were added, Bella did get what she wanted: the megalodon shark of the top predator was bigger, each shark had its own personality, some were ferocious, and some could coexist with human beings; Jason Wu, an actress, did stunts on the helicopter again, which shocked the staff at the scene. She described the scene as "crazy".

The crew often encounters the problem of cultural barriers, and the solution is simple and direct. If the thinking mode of foreigners in the play is concerned, the creators will mainly listen to the opinions of Warner Bros., the producer. If the thinking mode of China people is involved, the opinions of the Chinese culture of the other producer will become crucial.

As a filmmaker, Bella’s understanding of China culture mostly comes from movies. Facing the question "Which China movies do you like", she got up and took out a printed list from a side table, which recorded her favorite China directors and works. She put on her glasses and read the director’s name in unskilled Chinese. The list includes internationally renowned directors and rookie directors.

Bella appreciates Zhang Yimou and Jiang Wen the most, and also looks for the success logic of China’s commercial films in Dying to Survive’s Lost Her.

For Bella, only when she has seen enough movies can she appreciate the charm of culture. As a producer of a Chinese-foreign co-production, she should not only look for ways from past studies and make judgments on the production process, but also continue to learn from experience in the existing environment.

In her view, there is still a lot of room for improvement in monster films, and the audience’s highlights continue to be explored: "The visual effects of monster films are getting better and better, but in terms of story content, we can look at these deep-sea monsters in different ways. Just like everyone is different, there are differences between monsters, and it is not necessary to confront humans. There are various possibilities between monsters and monsters, monsters and people. "

Like any type of film, the progress of monster films requires the main creator to bring different content every time. Fortunately, there are still many possibilities to be created for the genre of deep-sea monsters in this track unfamiliar to China audiences.

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Porsche Taycan new car confirmed for Los Angeles Auto Show

2025年2月3日 | admin | sports

　　[Aika car, overseas new car, original]

　　Recently, we learned from relevant channels that Porsche will bring the third body style of the Taycan model at the 2021 Los Angeles Auto Show. Although no further details have been disclosed, Porsche said it is considering launching a new model that is the opposite of the Taycan Cross Turismo version, lowering the chassis suspension to the height of the sedan.

Porsche

718 GT4 RS

Cayenne Turbo GT

　　In addition to the new body style of the Taycan, Porsche will also unveil a new version of the Taycan between the 4S and Turbo models at the Los Angeles Auto Show, which is likely to be the Taycan GTS. Porsche has previously announced a part of the car lineup at the Los Angeles Auto Show, namely the 718 GT4 RS, the Cayenne Turbo GT, plus the announced Taycan GTS and the third body style of the Taycan family. The lineup of Porsche at the Los Angeles Auto Show is further confirmed.

Highlights Review:

"Speed Alliance" Porsche Guangzhou Auto Show lineup announced

The exclusive customized version of the real Porsche 911, just seeking to be unique

Porsche 911 plans to launch three new cars

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Pangdonglai ＂explodes＂ Xuchang

2025年2月1日 | admin | finance

The following article comes from Reading the City Studio, written by Li Hang.

Reading the City Studio.

Give me three minutes to show you the city.

Try to catch the "sky-throwing traffic"

Reprinted | Du Cheng Ji Studio

If you are in Xuchang for the first time, ask the driver what interesting places there are in the taxi, and the answers are basically the ruins of the Three Kingdoms and Pangdonglai, which represent Xuchang’s past and present respectively.

Xuchang is a fourth-tier city about 100 kilometers south of Zhengzhou, with an area of two-thirds of Zhengzhou and a population of only one-third of Zhengzhou. In 196 AD, Cao Cao welcomed Emperor Xian of Han Dynasty to move the capital from Luoyang to Xuxu, and lived in Xuchang for 25 years, which made it famous.

In 2024, Super Fat Donglai, a local merchant in Xuchang, was well-known in China for its excellent service and humanized management, attracting online celebrity, research teams and young people from all over the country.

As a result, some people joked: "In ancient times, Cao Cao held the emperor to make the princes, but now there is a fat east to stabilize the supply of goods and rectify the supermarkets."

According to official data, during the May 1 holiday in 2024, the three stores of Pangdonglai Angel City, Times Square and Life Square received about 1.55 million tourists. Because you can wander around casually without spending tickets, Fat Donglai has also been dubbed as the most cost-effective "5A scenic spot" in China.

The popularity of Fat East has also revived Xuchang’s tepid tourism market.

Before Fat Donglai became popular, Xuchang’s tourism industry was actually not strong. The data shows that in 2019, Xuchang, the main theme of the "Three Kingdoms", received a total of 31.9662 million tourists, with a total tourism revenue of 21.355 billion yuan. In the same year, Luoyang received 142 million tourists, and the total tourism revenue reached 132.102 billion yuan, six times that of Xuchang.

Nowadays, with the explosion of Fat Donglai on the Internet and the increase of tourists’ attention to small town tourism, the popularity of Xuchang’s cultural tourism market continues to climb.

During the May Day holiday in 2024, Xuchang received a total of 4.8 million tourists, achieving a comprehensive tourism income of 3.744 billion yuan, up 115% and 118% respectively compared with the May Day holiday in 2023 and 169% and 196% respectively compared with the May Day holiday in 2019, reaching a record high.

Born in Xuchang, Fat Donglai has grown into a "god-like existence of retail industry in China" on this fertile soil, and after he left the circle, the traffic from the sky has also "exploded" the city.

"Multi-faceted" Xuchang

Before the popularity of Fat East, many people didn’t know about Xuchang.

"Grasping one hand is a legend, and kicking one foot is a brick and tile". Xuchang has a long history and splendid culture.

In 196 AD, Cao Cao moved the capital to Xuxian (now Xu Changdong, Henan Province), "relying on the emperor to make princes"; In 220 AD, Cao Pi established Wei in the Han Dynasty. Because Wei Jichang was in Xu, Xu County was changed to Xuchang, and the name of Xuchang has been used for more than 1800 years.

It has been calculated that 59 of the 120 Romances of the Three Kingdoms took place in Xuchang. In Xuchang, the story of the Three Kingdoms is widely circulated, and the monuments of the Three Kingdoms are scattered everywhere. Names related to the culture of the Three Kingdoms can be seen everywhere. Among the 300 cultural sites of the Three Kingdoms in China, Xuchang monopolizes more than 80 sites, including Baling Bridge, where Guan Yu resigned his robes, and the Spring and Autumn Building, which was read by candlelight at night.

△ Xuchang Chunqiu Building Source: official website, Xuchang Municipal Government

Today’s Xuchang, the modern atmosphere slowly spreads from the thick historical gap.

As a traditional old industrial city in the hinterland of China’s Central Plains, Xuchang has carried out large-scale industrialization since 1960s. Equipment manufacturing industry, food processing industry, textile industry, energy and electricity industry are all traditional advantageous industries in Xuchang.

Moreover, Xuchang’s private economy is developed, and it is known as "Wenzhou in Henan", and the proportion of private economy in the total economic output ranks first in the province.

If you have seen the hit drama "Chicken Feathers Fly to the Sky", you will be particularly kind to Xu Changren’s family history. Xuchang wig entrepreneur who made his fortune in the streets and lanes is exactly the same as Chen Jianghe’s story.

"A wisp of hair" gave birth to Xuchang’s annual cross-border e-commerce transaction volume exceeding $1 billion. In 2022, the cumulative import and export volume of hair products in Xuchang reached 17.9 billion yuan, making it the largest distribution center and export base of hair products in China and even in the world.

Among them, the products of Rebecca, the star enterprise of Xuchang wig industry, are sold to more than 40 countries in Asia and Africa and more than 100 large and medium-sized cities in China. In 2023, Rebecca achieved a total operating income of 1.226 billion yuan.

Besides these, Xuchang is a livable city.

In 2023, the short video "Xuchang Don’t Panic" shot by Fan Jinlin, a native of Xuchang, became popular on the Internet. In the video, he takes "3,000 yuan a month to experience the happiness of Xu Changren" as the main line, showing the pyrotechnic side of Xuchang.

In Xuchang, water bus, which travels around the city, 3 pieces; Open-air barber shop, 5 yuan; For 300 yuan, you can invite the students in the whole dormitory to open a booth and listen to the LIVE SHOW for one night. Even, you can find many free pleasures here, such as swimming in Yinma River, or going to Liyuan Pavilion to watch a movie for free.

Fat East brings "sky-splashing traffic"

Henan Ozawa fell in love with this place when he first went to Xuchang in 2018.

He thinks the city is clean and tidy, and there are free football fields and basketball courts everywhere, and there are also many smart bookstores. In other cities, high-rise buildings stand on the central axis, while Xuchang is a central park several kilometers away. This layout is very much like Manhattan, the core area of new york in the United States.

"What is special about Xuchang is that in today’s fast-paced society, life here is very relaxed. Persimmons and pomegranates can be picked from trees, mussels and crayfish are planted in the river, and various aquatic plants are planted along the river. Living here can experience the joy of nature. In addition, there are many companies with temperature such as Fat East, so it can be said that life in Xuchang is guaranteed. " Ozawa said.

△ Shenyu Ancient Town Source: official website, Xuchang Municipal Government

Ozawa said that at that time, Fat Donglai had not been out of the circle on the Internet, and there were still few tourists. It was very fast to enter and leave the station at the railway station. "At that time, some people knew about Xuchang, but they didn’t understand that the city was like transparency. When everyone mentioned the cities around Zhengzhou, the first reaction was Luoyang and Kaifeng, and even more college students went to Xinxiang than Xuchang. "

The trip from the fat east gave the outside world a chance to know Xuchang.

In 2020, Fat Donglai boarded a hot search because he sold all vegetables at the purchase price during the epidemic, and was called a "conscience enterprise" by netizens. After that, Fat Donglai began to be known by the public.

In 2022, Fat Donglai Supermarket launched "online celebrity Big Moon Cake", which was sold out immediately after it was put on the shelves, and the enthusiasm of customers for buying it continued to heat up. Fat Donglai Big Moon Cake quickly became popular on the Internet and was snapped up by the market. Many customers queued up all night to buy moon cakes at high prices.

Fat Donglai gradually changed from Xuchang local supermarket to online celebrity supermarket.

By 2023, with the opening of Zhengzhou-Xuzhou regional railway and the boost of network traffic, the passenger flow from Fat East has increased significantly. According to the summary released by Xuchang Municipal Bureau of Culture and Tourism, during the Mid-Autumn National Day holiday in 2023, Fat Donglai received a total of 2.7 million tourists, and only Angel City of Fat Donglai received 1.4 million tourists, of which foreign tourists accounted for more than 95%.

During the holiday, Xuchang received a total of 7.504 million tourists. In other words, nearly one-third of the tourists have visited the Fat East.

In recent years, with the change of young people’s travel concept, it has become common to travel for a concert, a small barbecue and a bowl of mala Tang.

According to Sun Jiashan, an associate researcher at the Central College of Culture and Tourism Management, the consumption of cultural tourism is shifting from traditional scenic spots to diversified entertainment consumption. With the gradual diversification of the tourism market, tourists are no longer satisfied with the traditional "cursory tour", but pay more attention to the high-quality experience in the whole process of travel, looking forward to finding a tourist destination that can really make them feel happy psychologically and deeply feel the local lifestyle and customs.

For today’s young people, they often don’t like the traditional way of traveling when traveling with a group, such as getting on the bus and sleeping, getting off the bus and taking photos, and getting together to travel to big cities has become a past tense.

They prefer to jump out of the already tired tourism formula, find some small cities and personalized scenes full of beautiful life elements, such as those small cities in the fourth and fifth lines or unpopular scenic spots that are not so popular, and visit here at will. Fat Donglai and Xuchang just meet this demand.

The influx of tourists has brought a lot of changes to Xuchang. "There are obviously many more cars during the holidays than in previous years. I also specially looked at the license plate, which is found all over the country. " Ozawa said.

Since the beginning of this year, because of pet events such as "Fat Donglai earns only 30 cents for a down jacket", "Fat Donglai can get a half-price refund in response to dissatisfaction after watching the movie" and "Fat Donglai’s 13-page report investigates the incident of employees trying to eat", Fat Donglai has boarded social media hot searches more frequently. At this time, people’s tourism demand began to explode, and tourists from all over the country organized groups or punched in from Fat East by car to experience the service from Fat East.

"Before Fat East came out of the circle, Xuchang was a four-tier town in Henan. Now, with the help of traffic, this treasure city has been discovered, its popularity has been greatly improved, and urban development has begun to become faster and faster, which is more prosperous than before." Ozawa said.

In this regard, Sun Jiashan believes that "cultural tourism promotes the city" can not only directly promote the development of related industries, but also enhance the visibility and reputation of the city, attract more tourists and even investment, thus promoting the high-quality development of the city economy.

Adhere to IP empowerment

While Xuchang was seen, the city was also trying to catch the "sky-splashing traffic".

In March this year, in order to make it convenient for tourists to go shopping in Shangchao, the public transportation department of Xuchang City optimized and adjusted the bus line of Xuchang No.18, canceled nearly 40 stops, and started from Xuchang East Station and went directly to many stores in Pangdonglai, creating a convenient and efficient bus line for tourists.

This is just a microcosm of Xuchang’s "pet guest".

During the Spring Festival this year, Xuchang City released eight special tourist routes, including the Three Kingdoms Cultural Experience Tour, the Wonderful Tour of Jun Porcelain Treasures, the Experience Tour of Non-genetic Inheritance, and the Shopping Tour of Punching Cards from Fat East, and the places where 100 famous eaters and must-buy goods punched cards in online celebrity. Public parking spaces such as the Municipal People’s Congress, CPPCC compound, tourism service center and museum will continue to be open to tourists free of charge, which is convenient for tourists to park and visit.

In 2024, Xuchang’s government work report mentioned many aspects of culture and tourism. Clearly put forward to promote the development of traffic supermarkets such as Fat Donglai, support the "China Supermarket Week" and encourage all kinds of supermarkets to promote the "Fat Donglai" service standard. Accelerate the construction of two squares of modern commercial service industry in Weidu District and Hengda Xinduhui Commercial Complex in Jian ‘an District to create more new consumption scenes.

Xuchang is also making every effort to build the IP of the culture of the Three Kingdoms.

Up to now, Xuchang has held the 14th Three Kingdoms Cultural Tourism Week, which has successfully attracted a large number of tourists to visit the old places of the Three Kingdoms. At the same time, Xuchang also pays attention to combining the culture of the Three Kingdoms with the modern tourism format, and has launched a series of innovative products, such as the first domestic scripted entertainment "The World of the Three Kingdoms" for the new consumers of Z generation; Relying on Xuchang Museum, we will hold "Xu Guo chimes home" and "Three Kingdoms Cultural IP Global Creator Competition", so that visitors can deeply understand the history and culture of the Three Kingdoms during the experience.

△ Xuchang Caowei Ancient City Source: Xuchang Municipal Government official website

It is reported that the overall strategic positioning of Xuchang’s "14 th Five-Year Plan" cultural tourism is to build "three cities". That is, to build a famous historical and cultural city in the Three Kingdoms, an international cultural and creative city and an ecological and healthy city.

It can be seen that what Xuchang wants is not a temporary heat, but a long-term attraction to tourists.

Being a online celebrity-bound city can certainly enhance the influence of a city quickly, thus promoting the overall development of cultural tourism. However, in order to attract tourists continuously, it is necessary to dig deeper and show the unique local cultural characteristics. This in-depth cultural experience is very important for maintaining tourists’ interest and promoting sustainable tourism.

In the era of online celebrity, cities wanted to be red. Keeping sincerity and insisting on IP empowerment are the must-have skills for a small town like Xuchang to win in the highly competitive cultural tourism market.

Writing | Li Hang Editor | Li Guang Layout | Song

* Title Source: official website, Xuchang Municipal Government * This article does not represent the viewpoint of urban evolution, and the reprint is authorized.

Original title: "Fat Donglai" Explosive Reform "Xuchang"

Read the original text

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Or go public at the end of September？ Seal 06 GT interior spy photos exposure

2025年2月1日 | admin | weather

After entering 2024, we can find that BYD Club has been making great moves. For example, several new cars have been on the market some time ago, and the upcoming GT will be the most concerned in the near future. Recently, the spy photos of the car’s interior have also been officially exposed. According to the current product plan, the car is expected to be officially unveiled at the Chengdu Auto Show, which will open at the end of the month, and is expected to be officially listed on September 30.

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From the spy photos, it can be found that the 06 GT also continues the consistent design concept of the Ocean Net family in the interior, and the combination of full LCD instrument panel and suspended central control screen is also adopted above the center console. The overall style design is based on simple sports. Although the car is also called Seal 06, from the details of the interior, it will still be different from Seal 06 DM-i, which has been listed before.

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There is also a wireless charging panel under the central control screen, and the iconic crystal electronic gear handle and circular physical button area of Ocean Net family are also preserved.

Review the styling design of new cars.

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As far as the new car is concerned, its design is believed to be familiar to everyone. After all, it has appeared in the declaration list of the Ministry of Industry and Information Technology before, and there have been spy photos of real cars exposed. It can be seen that the new car has also adopted the latest family-style design of the ocean series, so the overall design of the new car has a high similarity with Seal 06DM-I. As a GT version, the car also has its own sports encirclement, which also makes the whole car look sporty.

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In addition, the length, width and height of the new car are 4630/1880/1490mm and the wheelbase is 2820mm, which is obviously different from that of Seal 06 DM-i (the dimensions are 4830mm long, 1875mm wide and 1495mm high and the wheelbase is 2790mm). Of course, this is also the consistent style of BYD’s products, like the DM-i version. Therefore, strictly speaking, they should be regarded as two independent products.

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Seal 06 GT from the orthodox pure electric platform will also provide a single-motor rear-drive version, in which the single-motor version provides two different powers of 160kW and 165kW, while the dual-motor version adopts the combination of front AC asynchronous motor (110 kW) and rear permanent magnet synchronous motor (200kW).

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In terms of battery pack, two kinds of blade batteries with specifications of 59.52kWh and 72.96kWh are provided, and the corresponding cruising range under CLTC condition is 505km, 605km and 550km (four-wheel drive version), which has also reached the mainstream level in endurance.

Write to the end

For BYD Ocean Net’s products, such as those with high popularity, including fleet series, etc., the product naming can be described in many ways, and after 2024, the naming of Ocean Net products will also be optimized and adjusted.

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At present, marine products are mainly divided into two series: "seal" series and "sea lion" series. Among them, the "Sea Seal" series corresponds to the car category, while the "Sea Lion" series corresponds to the SUV category. The number of product model suffix indicates the product grade, and the current product grade includes 05, 06, 07, etc. As for the tail logo of the product model, it represents the specific attributes of the product, such as DM-i logo for version. Like the Seal 06 GT mentioned today, the product had several declared names in the early days, and was even officially named Seal X. However, the current naming method is obviously more convenient for consumers to understand and identify.

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Oil pk： synthetic engine oil vs all synthetic engine oil

2025年1月31日 | admin | history

Choice: or? Now, the purchase of engine oil has become an important issue. Many car owners are confused when faced with all kinds of engine oil products. Among them, synthetic engine oil and synthetic engine oil are two common types of engine oil, and many car owners also want to know which one is better. This article will analyze the differences and characteristics of these two oils in detail and help you make the right choice. First of all, let’s understand the definitions of these two kinds of engine oils: synthetic engine oil refers to the engine oil prepared by synthetic method, while all synthetic engine oil refers to the engine oil blended with fully synthetic base oil. Compared with mineral engine oil, these two kinds of engine oils have higher performance and longer service life. So, which engine oil is better? Let’s analyze their advantages and disadvantages. The advantage of synthetic engine oil is that it has good high temperature resistance and oxidation resistance, which can effectively protect and prolong its service life.

In addition, synthetic engine oil has a high viscosity index, which can keep the viscosity stable in a wide temperature range, thus providing better lubrication effect for the engine. However, due to its relatively high price, not all car owners can accept it. Synthetic engine oil has better durability and fuel economy. Because it is made of synthetic base oil, it has better oxidation stability and high temperature performance. When the engine runs at high temperature for a long time, synthetic engine oil can better protect the engine. In addition, synthetic engine oil has a lower viscosity, which can reduce the friction loss of the engine, thus improving fuel economy. However, the price in synthetic engine oil is relatively high, which is not suitable for all car owners. On the whole, whether to choose synthetic engine oil or synthetic engine oil should be decided according to your vehicle and driving habits.

If you are driving a luxury car or car, and often drive in high temperature environment for a long time, then synthetic engine oil may be a better choice. Because this type of vehicle needs better lubrication and protection to keep the engine running normally. At the same time, if you pay attention to fuel economy and want to extend the service life of the engine, then synthetic engine oil is also a good choice. However, if you are driving an economical car or commercial vehicle and the driving environment is relatively good, then synthetic engine oil may be more suitable for you. There are other factors to consider when making a choice. The first is the viscosity selection of engine oil. The higher the viscosity, the worse the fluidity at low temperature, while the lower the viscosity, the worse the lubricity at high temperature. Therefore, when choosing engine oil, you should choose the viscosity grade suitable for your vehicle type and use environment. Secondly, the brand choice of engine oil.

Choosing famous brand engine oil can not only ensure the quality and performance of engine oil, but also get better after-sales service. In a word, whether to choose synthetic engine oil or synthetic engine oil should be decided according to your vehicle and driving habits. In the selection, factors such as performance, price, viscosity grade and brand of engine oil need to be considered. I hope this article can help you make the right choice. Finally, ask a question: Do you choose synthetic engine oil or all of synthetic engine oil? Why? Synthetic engine oil and synthetic engine oil are two common types of engine oil on the market. But you may be confused when choosing which oil is suitable for your vehicle. This article will discuss the characteristics and scope of application of synthetic engine oil and synthetic engine oil to help you make a wise choice. First of all, let’s understand the differences between synthetic engine oil and synthetic engine oil.

All-synthetic engine oil is manufactured by artificial synthesis, and its molecular structure is very uniform, with excellent lubrication performance and thermal stability. Synthetic engine oil is made by mixing it with synthetic base oil, and its performance is between mineral oil and all of synthetic engine oil. So, what kind of vehicles are suitable for use in synthetic engine oil? The performance requirements of synthetic engine oil are relatively high, which is suitable for high-performance engines and vehicles requiring higher lubrication performance. If you own a sports car or often drive at high speed, then all of synthetic engine oil will be a good choice. It can provide better lubrication and protection, reduce friction and wear, and prolong engine life. For general family cars, synthetic engine oil may be more suitable. This type of vehicle has relatively low performance requirements for engine oil, and the price in synthetic engine oil is relatively low, which can better meet your budget requirements.

Synthetic engine oil still has good lubricity and oxidation resistance, which can effectively protect the engine and prolong the oil change cycle. Of course, whether you choose synthetic engine oil or synthetic engine oil should be decided according to your vehicle type and driving habits. If your vehicle has high performance and often drives with high load, then synthetic engine oil may be more suitable. And if your vehicle is mainly used for daily commuting or long-distance travel, then synthetic engine oil may be a more economical choice. In addition to choosing engine oil type, we should also pay attention to choosing regular channels to buy reliable engine oil products. There are many fake and shoddy engine oil products on the market, and their quality cannot be guaranteed, which is likely to cause damage to the engine. Therefore, when buying engine oil, it is recommended to choose a brand with credibility and reputation, and ensure that the product has relevant certification marks. In a word, it is very important to choose the oil type suitable for your vehicle.

All of synthetic engine oil and synthetic engine oil have their own advantages and scope of application. Make a wise choice according to your vehicle type and driving habits. At the same time, remember to choose regular channels to buy reliable oil products to ensure that your vehicle is fully lubricated and protected. Do you know the difference between synthetic engine oil and synthetic engine oil? Do you have any questions or other suggestions about choosing engine oil? Welcome to share your thoughts with us in the comments.

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Kaiyi is serious, stylish and steady.

2025年1月20日 | admin | finance

In the competition with the same class models, it is worth mentioning in terms of space performance. Not much to say, let’s take a look.

First of all, from the appearance, the front of Xuanjie Pro gives people a feeling of being very individual and simple. Combined with personalized headlights, the visual effect is still good. The car is equipped with LED daytime running lights, automatic opening and closing, delayed closing and so on. Come to the side of the car, the car body size is 4400MM*1831MM*1653MM, the car uses simple lines, the side looks very delicate, with large-sized thick-walled tires, giving people a very full feeling. In the design of the rear of the car, the overall shape of the rear of Xuanjie Pro echoes the front of the car, and the taillights look very sharp. Coupled with the unique exhaust pipe, the overall layout is impressive.

Coming into the car, Xuanjie Pro interior enhances the visual sense of individuality and gives people a very unique feeling. The steering wheel of the car is very in line with the interior style, and it is made of leather, which makes people love it. From the central control point of view, the car is decorated with a clean touch-sensitive LCD central control screen, which makes the interior design quite layered and fashionable. Let Xiaobian introduce the dashboard and seats. The dashboard of this car presents a fashionable design style, which is very eye-catching. The car uses a leather-like seat, the seat is wrapped in place, and the overall ride feels soft and comfortable.

Xuanjie Pro is matched with CVT gearbox, with maximum power of 115KW and maximum torque of 230N.m, and its power performance is good.

The back row space of Xuanjie Pro is good, and it is no problem to meet the daily travel needs. In addition, the car is equipped with anti-lock braking (ABS), LED daytime running lights, brake assist (EBA/BAS, etc.), braking force distribution (EBD), traction control (ASR/TCS, etc.), main driver airbag, co-pilot airbag, front side airbag and other safety configurations.

I wonder if you are excited about this car introduced today? If you have plans to buy a car now, then today’s car is worth learning about.

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Jietu finally shows its trump card, which is highly matched and exquisite.

2025年1月19日 | admin | fun

For pragmatists, low fuel consumption is a good thing. After all, fuel cost is a big part of the daily car cost. As a medium-sized suv, there are many highlights. Next, let’s take a look with Xiaobian.

Let’s take a look at the appearance of the Jetway X90. The front face of the Jetway X90 has improved the grade of the whole vehicle, and the air intake grille has a multi-spoke design, which is very sporty. The front headlights are fashionable and generous, which looks quite classy. The car is equipped with LED daytime running lights, automatic opening and closing, delayed closing and so on. Come to the side of the car, the car body size is 4858MM*1925MM*1780MM, the car uses comfortable lines, the car side looks very dignified, with large thick-walled tires, eye-catching shape. In the design of the rear end, the overall shape of Jetway X90′ s rear end echoes the front end, and the taillights are very individual. The layout of the exhaust pipe uses a bilateral single-row shape, and the overall shape is still very attractive.

In terms of interior, the interior of Jietu X90 is full of publicity and meets the aesthetic standards of young people. The steering wheel of the car is very cold, made of leather and full of design. Take a look at the central control, which is decorated with a 12.3-inch central control screen, which makes the interior design quite layered and meets the aesthetic standards of most consumers. Let’s take a look at the dashboard and seats again. The car is equipped with angular dashboard, and the trendy design elements make people remember it at a glance. The car uses leather-like seats, equipped with functions such as seat proportion down, and the overall comfort and wrapping are not bad.

The Jetway X90 is matched with a wet dual clutch (DCT) gearbox, with a maximum power of 145KW and a maximum torque of 290N.m, with good power performance.

The performance of Jetway X90 trunk space is relatively good, the opening size is in line with its positioning, and the family’s storage needs can be met. At the same time, the car is equipped with anti-lock braking system (ABS), LED daytime running lights, brake assist (EBA/BAS, etc.), braking force distribution (EBD), traction control (ASR/TCS, etc.), main driver airbag and co-pilot airbag.

After reading the above introduction, let’s make a summary. This class of cars is usually the first choice for most people. First of all, the price is not expensive, and secondly, all the configurations are quite complete, which is still very worth starting with.

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Japanese! ＂Northeast Police Story 2＂ exposed the ultimate warning that Xie Miao was a bully

2025年1月18日 | admin | finance


1905 movie network news Directed by Yang Bingjia, written by Yang Bingjia, with Wei Junzi as the chief producer and starring, the film starring Jiang Yixuan, Zhang Li, Xing Han, Liu Fengchao, Fang Yan and Cathy premiered on the whole network. The film released the ultimate preview and poster simultaneously, and the curtain of the wonderful burning story was officially opened.


The film tells the story of Li Hongqi (Xie Miao), a hot-blooded criminal police officer, investigating a suspicious case of a couple falling from a building, accidentally discovering the evil forces hidden in the underground of a small town in the northeast and fighting against them, punishing evil, promoting good and upholding justice.


The just little policeman was humiliated, fearless and evil forces beat up shameless thugs


The ultimate preview released this time is rich in content and full of stories. In the place where people are intoxicated with money, the evil people are arrogant and triumphant, and they are wantonly provocative to Interpol Li Hongqi; Li Hongqi was asked about his salary, verbally humiliated, and even left a bundle of money directly in front of him; "How much do you earn a month?" "What are you fighting for?" Waiting for the lines to be extremely rampant and irritating; And Li Hongqi was bleeding and injured in the process of fighting with them, which made people worry about it. However, no matter how vicious the gangsters are, Li Hongqi always sticks to the police mission and guards the police’s glory, and fights with them to the death and will never give up! In the second half of the preview, Li Hongqi fought back with his great skill, and staged many high-burning action scenes, which can be described as a spurt of blood and a great delight to the people.


The final preview shows the theme of the film "Blowing up the Uneven" incisively and vividly, which not only shows that the police represented by Li Hongqi will never tolerate evil, but also highlights the style characteristics of the film’s hard-core action and deflagration. Li Hongqi told the wicked his salary word for word, proudly saying that "3.16 million people in Binzhou gave me money" and fought to the death to protect the people and eliminate evil, which showed a touching connection between the police and the people.


The ultimate poster released at the same time is distinctive in style and full of visual impact. The picture uses cold and warm contrast colors, which skillfully combines tough guys with warm blood; Li Hongqi attacked with clenched fists and clanked with iron bones. Behind him, the evil forces headed by Ma Qiang (Zhang Li) were sinister and ruthless, trying to besiege. The hardcore action movie temperament presented by the poster as a whole attracted many viewers to watch the feature film.


Xie Miao’s blood is unyielding, and many battles are burning with one enemy.


Northeast Police Story 2 is a police action crime movie with the theme of eliminating evils, which has a fast pace, high plot and a wide audience. From the discovery of young couples who committed suicide with grievances, to the girl who was involuntarily controlled by a bully, to the excavation of all kinds of evil deeds committed by Ma Qiang, Zhen Sanjiang (Xing Han) and Qi Dawei (Cathy), Li Hongqi has always vowed to dispel evil with a righteous heart and return the world to light and justice. On the road of fighting against evil forces, no matter how many difficulties and obstacles encountered, the people’s police fought to the end and never bent their backs. This blood is full of appeal, and I believe it will bring a long-lasting agitation to the audience.


The film is a well-made action film, which is meticulous in actors and action design, and strictly adheres to quality. Xie Miao, a martial arts movie star, starred in Li Hongqi. From beginning to end in the film, he laid the foundation for the action movie with hard work. Li Hongqi’s two high-energy fights with his brother 18th (Liu Fengchao) and Zhen Sanjiang, as well as the final duel with Ma Qiang, are all high-energy famous scenes in the film. They are not only exciting and dazzling, but also exciting and refreshing. In the film, most of the scenes are in a narrow and semi-enclosed space, such as a toilet compartment of more than one square meter, a garage of less than 15 square meters, etc. The scenes are constantly changing, and the difficulty of the action is upgraded to be rich and diverse, which is full of highlights and colorful. If you want to experience the movie-watching experience of adrenaline soaring in this summer and rekindle the long-lost blood, Northeast Police Story 2 is a choice not to be missed.

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Is iCAR 03T worth buying？ Analysis of Reliability and User Evaluation

2025年1月16日 | admin | sports

Friends in front of the screen, debut! As soon as it went public, it gained a high degree of attention. It is driven by science and technology, which brings infinite possibilities for users to travel. The internet thinking design of this car makes it stand out among many models, fashionable and intelligent. Coupled with excellent off-road performance, it is perfect for both exploration and daily commuting. The brand-new T’s eye-catching small square box shape adds a unique charm to it. It seems to be a pearl in the automobile world, emitting dazzling light. Come and enjoy the style of iCAR 03T together.

Let people do whatever they want.

As a dream car for outdoor adventure enthusiasts, iCAR 03T carefully creates a flexible space, and the rear row changes to a big bed every second, so that every passenger can enjoy a comfortable rest space. Thanks to Harvard technology, the car can be turned into an all-terrain control center, and no matter whether it is a mountain or a city, you can do whatever you want.

Details innovation, creating a perfect journey

In addition, the outstanding body size and ground clearance make this car easily accommodate outdoor adventure equipment, and the details are humanized. In addition, the trunk can also be transformed into an outdoor activity center according to demand, and you can find fun here for both games and entertainment.

One car is multi-purpose, free and easy.

Smart space is another highlight of iCAR 03T. After that, the layout is inverted, and the space is spacious, which can be expanded into a temporary rest area, which can easily accommodate many people to have a rest and make family trips more comfortable.

Enjoy the barbecue hot pot at will, with the external discharge function of iCAR 03T.

In order to make camping life more convenient, iCAR 03T is also equipped with an external discharge function, which can realize power supply in the wild and easily supply cooking needs, whether it is outdoor hot pot or barbecue, or even connect a portable computer to let e-sports enthusiasts enjoy it. It is worth mentioning that iCAR also has a strong lighting system, which can illuminate night adventures; Surrounding lighting can illuminate a wide area and provide sufficient lighting for night activities, ensuring users to enjoy camping in a safe and bright environment.

High passability and high comfort.

In order to make drivers have the confidence to move forward in rugged wilderness, iCAR 03T is equipped with intelligent four-wheel drive and high-strength body, with all-terrain feedback system, fearless of all kinds of challenges, and its body is made of all-aluminum material, which can ensure the stability of the body structure and enhance safety.

ICAR03T hard-core SUV with low energy consumption and high performance.

It is worth mentioning that iCAR 03T subverts the traditional impression of energy consumption, and it is equipped with an efficient energy management system to achieve high power efficiency. Even in the four-wheel drive version, the fuel consumption is extremely low under complex road conditions, which dispels the energy consumption concerns of hard-core SUVs, and also has long endurance. In addition, it supports fast charging and has no endurance anxiety at all.

Appearance is also a bright spot.

Finally, the appearance of iCAR 03T is also its highlight. ICAR 03T is equipped with an off-road style kit, with a wider front enclosure and an air inlet shape, which enhances the off-road atmosphere of the vehicle. Compared with iCAR 03, the area of the middle net has increased, and the word "iCAR" has been added to the side of the decorative board of the middle net to replace the original "I" letter LOGO. This change makes the new car more in line with the unified style of the iCAR brand. The shape of the front bumper has been adjusted, and front fog lights have been added on both sides to improve the driving safety in rainy and foggy weather. A silver lower guard plate is added at the bottom to further improve the protective performance of the vehicle. In the side part, iCAR 03T adds an outline kit at the front and rear fenders, and the shape of cooling holes is added at the rear side of the front fender. These designs make the visual effect of the side of the car body more sporty. In addition, the new car uses larger wheels, which increases the passability of the vehicle.

ICAR 03T has many advantages. The strength of the new hard school is fully demonstrated, with fashionable shape, large space, good comfort and low energy consumption. The value far exceeds the same level, and the price is close to the people. 139,800, and the replacement price of oil trucks is lower. The four-wheel drive version is more attractive and the price difference is small. Make a decision before October 31, 2024, and you can enjoy five gifts. Would you choose it? Let’s look forward to the excitement brought by this car.

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In-depth report of Xiaomi Group (01810)： Overseas market becomes a new engine of growth, and mobile phone ×AIoT creates an ecological moat.

2025年1月14日 | admin | history

Xiaomi Group is an Internet company with mobile phones, intelligent hardware and AIoT platform as its core. Starting from smart phones, Xiaomi has continuously expanded its business to all kinds of intelligent hardware, creating the world’s largest AIoT Internet of Things ecosystem. With its excellent intelligent hardware products, Xiaomi has gained a huge user traffic base. In 2021Q3, Xiaomi’s smartphone market accounted for the third place in the world, and the monthly activity of MIUI exceeded 500 million in November 2021. Based on the perfect product ecology and strong user growth, we expect Xiaomi to maintain a good growth momentum, and the EPS of 2021e/2022e/2023e is 0.80/0.88/1.04 yuan. We gave Xiaomi 2022E 21 times PE, corresponding to the target price of HK$ 23.09, and gave a buy rating for the first time.

Key points of investment

1. Grasp the rapid rise of the times, and excellent business strategies promote healthy growth.

Since its establishment in April 2010, Xiaomi has grasped the windfall dividend in the era of smart phones, and has developed into a smart phone manufacturer with the third market share in the world. In 2021Q2, its market share once surpassed Apple and jumped to the second place in the world. Xiaomi’s "triathlon" model continues to boost the company’s healthy growth through the coordinated growth of businesses: 1) the hardware ecology with smart phones as the core; 2) Internet service with MIUI as the core; 3) The new retail with the combination of online and offline represented by Xiaomi Mall Xiaomi Home.

2. Give full play to its own resource endowment and Xiaomi will enter the electric vehicle industry.

In March 2021, Xiaomi announced its entry into the electric vehicle industry. We think there are two main reasons: 1) looking for new business growth points in the future; 2) Give full play to its own advantages and improve the business ecosystem. The global smartphone market has entered the stock game, while the electric vehicle industry is in an explosive period, which is expected to become a new business growth engine of Xiaomi in the future; Electric vehicles will become an important part of Xiaomi’s hardware ecology, and its software and hardware research and development also overlap with smart phones in technology, which can make good use of Xiaomi’s technology and ecological resources.

3. "Mobile phone ×AIoT" is the core strategy to build an ecological moat.

Intelligent hardware business is the main way for companies to attract customers. Compared with traditional Internet companies, the high customer acquisition cost has achieved a "negative" customer acquisition cost. Then through the "1+4+X" hardware ecology, the user’s stickiness is greatly improved. Smartphone business in 2021Q2 exceeded expectations, and its market share surpassed that of Apple, ranking second in the world. However, in 2021Q3, affected by the supply chain, the performance of smartphones was under pressure. Xiaomi’s AIoT business has established the world’s largest AIoT Internet of Things platform through advanced layout. In 2021Q3, due to factors such as overseas shipping and logistics, the revenue of IoT and consumer products reached 20.9 billion yuan, and the growth rate slowed down. Internet services are realized by the traffic brought by hardware business, and the revenue in 2021Q3 was 7.34 billion yuan (+27% YoY), among which the advertising business grew against the trend and exceeded expectations.

Risk warning

Competition in the global smartphone market has intensified; The company’s high-end progress is less than expected; Overseas market expansion faces policy risks; The construction of offline channels is less than expected.

1. The rapidly rising upstart in science and technology has become an industry giant.

2. Build an ecological moat with the core strategy of "mobile phone ×AIoT"

3. Internet service is the core of ecological realization and profit.

4. The strategy drives the success of the enterprise, and there is much to be done in the short term.

5. Profit expectation and valuation

6. Financial statements

1. The rapidly rising upstart in science and technology has become an industry giant.

Xiaomi Group is an Internet company with mobile phone, intelligent hardware and AIoT platform as its core. With its smart phone as the core, the company has continuously expanded to all kinds of intelligent hardware, including tablet computers, notebook computers, smart bracelets and various household appliances, and built the ecosystem of Xiaomi AIoT Internet of Things platform.

Since Xiaomi was formally established in April 2010, the company has achieved amazing high-speed growth. In the third year of its establishment, its smartphone share has entered the top three in China. In the seventh year, the revenue has exceeded 100 billion yuan, and it has become the world’s largest intelligent hardware IoT platform; In the eighth year, it became the youngest enterprise in the world’s top 500, and it has been on the list for three consecutive years, and its ranking has been rising. In the second quarter of 2021, the company’s global smartphone sales surpassed Apple, and it was promoted to the second place in the world for the first time, with a global market share of 17%.

Chart 1: Milestones of Xiaomi Group

Source: Company official website, Zheshang International.

1.1. The company grew strongly in the first half of the year, and Q3 performance was constrained by the shortage of upstream supply.

By the first half of 2021, the overall performance of Xiaomi Group’s 21H1 had a strong growth, benefiting from the substantial increase in smartphone shipments (+78% YoY) and the steady and progressive overall gross profit margin (+3 ppts YoY). The company achieved a total revenue of 164.7 billion yuan (+59.5% YoY) in 21H1, with a total profit of 16.1 billion yuan (+141.3% YoY) and an adjusted net profit of 12.4 billion yuan (+118.4% YoY). In the same period, 21Q2′ s total revenue, interim profit and adjusted net profit all reached record highs in a single quarter, reaching 87.8 billion yuan (+64.0% YoY), 8.3 billion yuan (+83.9% YoY) and 6.3 billion yuan (+87.4% YoY) respectively.

In 2021Q3, Xiaomi achieved a single-season revenue of 78.1 billion yuan (+8% YoY), with a year-on-year growth rate declining. The decline in revenue growth in 2021Q3 is mainly due to the tight supply of upstream core components, resulting in the pressure on mobile phone and intelligent hardware shipments. In 2021Q3, the shipment of smartphones was only 43.9 million units, a decrease (-5.8% YoY) compared with the same period last year. However, the overall gross profit margin of the company (18.3%) exceeded expectations, and the adjusted net profit reached 5.2 billion yuan (+25% YoY).

Chart 2: Xiaomi Group’s total quarterly revenue

Source: Company Financial Report, Zheshang International.

Chart 3: Xiaomi Group’s quarterly adjusted net profit

Source: Company Financial Report, Zheshang International.

1.2. Xiaomi Group’s products and businesses are diversified, and the "triathlon" grows together.

Xiaomi Group has diversified its products and businesses through its own business and investment layout. Up to 21H1, the company has invested in more than 330 eco-chain companies, and has built the world’s largest consumer AIoT Internet of Things platform, combining smart phones and Internet services, weaving a diversified product business structure.

1) The hardware ecosystem starts from the core smart phone, and the products extend to the peripheral products of the mobile phone (including headphones, mobile power supplies, routers and stereos, etc.), and then further involve all kinds of intelligent hardware (including water purifiers, rice cookers, balance cars and air purifiers, etc.), and finally even extend to all kinds of household consumables (including towels, toothbrushes, ornaments and clothing, etc.).

2) The product ecology of the Internet mainly takes MIUI operating system installed on Xiaomi mobile phone and various hardware as the entrance, and expands the company’s products and business to various Internet value-added services such as advertising, games and financial technology. In addition, it also includes e-commerce platforms independent of the MIUI system.

Chart 4: Xiaomi’s diversified business matrix

Source: Notes on Xiaomi Ecological Chain Battlefield, Zheshang International.

By combing and integrating Xiaomi’s business lines, we can divide it into three categories: 1) hardware ecology with smart phones as the core; 2) Internet service with MIUI as the core; 3) The new retail with the combination of online and offline represented by Xiaomi Mall Xiaomi Home.

These three categories are also defined by the company as the "triathlon" business model: using highly cost-effective hardware equipment to get customer drainage and guide traffic to Xiaomi’s Internet service; Internet services realize traffic realization by providing various Internet value-added services to hardware users; New retail plays the role of a catalyst for drainage efficiency, and realizes the development and retention of user traffic through the development of online and offline retail channels.

Chart 5: Xiaomi’s triathlon business model

Source: Prospectus, Zheshang International

The business model of "triathlon" hardware ecological drainage Internet service realization can also be seen from the company’s profit structure. In the total revenue structure of Xiaomi in 2021Q3, the total revenue of smartphones, loT and consumer products accounted for 88%, while the total gross profit only accounted for 60% of the company’s total gross profit level; On the other hand, the revenue from Internet services only accounts for 9% of the total revenue, but it contributes nearly 38% of the company’s gross profit. This profit structure intuitively reflects the company’s low gross profit margin level in hardware business, which is also in line with Xiaomi’s long-standing cost-effective route and the commitment that the comprehensive net profit margin of hardware business does not exceed 5%, and the user traffic is obtained by price exchange.

Xiaomi has positioned itself as an internet company rather than a hardware company, and its efficiency is extremely high compared with that of ordinary internet companies by means of hardware ecological drainage. At a time when Internet traffic resources are precious and the cost of obtaining customers is rising, attracting traffic through the cost-effective hardware ecology not only makes profits while draining, but also greatly strengthens the user’s stickiness.

Chart 6: Proportion of Xiaomi’s business income to total income in 6：2021Q3

Source: Company Financial Report, Zheshang International.

Chart 7: Gross profit ratio of Xiaomi’s businesses to total gross profit in 7：2021Q3

Source: Company Financial Report, Zheshang International.

However, Xiaomi does not stop at the price/performance ratio. After occupying the target customers who pay attention to the price/performance ratio and price sensitivity, in order to expand the target customer market and enhance the brand positioning of Xiaomi, the company started its own high-end road.

In 2019, the company announced that Redmi Redmi series mobile phones will be independent as a brand new brand, continuing the past cost-effective strategy, focusing on the thousand yuan machine market, and the brand label of "extreme cost-effective" is deeply rooted in the hearts of the people; The Xiaomi brand is positioned in the middle and high end, focusing on the price range of 2,000 yuan to 3,000 yuan or more, and positioning different customer groups through different series to expand the market scale and realize the overall high-end and differentiation. For example, the Mix series, the Civi series and the G series, etc.

Among them, the Civi series released in the second half of 2021 accounted for more than 60% of the new users of Xiaomi by 2021Q3, and the female users accounted for more than half, which well penetrated into the customers who prefer fashion; Gaming mobile phones contribute to the internet business by covering the corresponding population, and their users’ game income is three to four times that of mobile phones at the same price segment.

Xiaomi’s high-end strategy has been steadily advanced. In the first three quarters of 2021, Xiaomi shipped nearly 18 million smartphones priced at 3,000 yuan in the mainland and 300 euros or more overseas, accounting for more than 12% of the total global shipments. In addition to the domestic market, Xiaomi is also promoting the high-end overseas market. In 2021Q3, Xiaomi’s overseas smartphone shipments with a price of 300 euros and above increased by over 180% year-on-year. Benefiting from the increase in the proportion of high-end mobile phone shipments, the average selling price (ASP) of the company’s smart phones has stabilized above 1000 in the past two years.

Chart 8: Average selling price of Xiaomi smartphone

Source: Company Financial Report, Zheshang International.

Chart 9: Xiaomi Smartphone Product Matrix

Source: Company official website, Zheshang International.

1.3. Xiaomi officially entered the smart electric vehicle industry.

Xiaomi’s business extension does not stop at the moment. In March this year, Xiaomi Group announced that Xiaomi’s smart car business was officially established and officially entered the electric vehicle industry. And plans to set up a wholly-owned subsidiary, with Lei Jun as the CEO of smart car business. The initial investment is 10 billion yuan, and the estimated investment in the next 10 years will reach 100 billion yuan.

In September this year, Xiaomi Automobile was officially registered with a capital injection of 10 billion yuan, with Lei Jun as the legal representative, and the first automobile manufacturing factory settled in Yizhuang, Beijing. The company said on the investor’s day in October that all processes of the electric vehicle business far exceeded expectations, and it is expected that Xiaomi Automobile will be officially mass-produced in the first half of 2024.

1.3.1. Why should we enter the electric vehicle industry?

Regarding why Xiaomi wants to enter the electric vehicle industry, we think it can be explained from two aspects: 1) looking for new business growth points in the future; 2) Give full play to its own advantages and improve the business ecosystem.

1) Looking for new business growth points in the future.

The global smart phone market has entered the stock game, while the smart electric vehicle industry is in an explosive period. According to IDC data, global smartphone shipments have recorded negative growth for four consecutive years since reaching a high point in 2016. Driven by the strong recovery in several emerging markets, shipments rebounded (+4.8% YoY) in 2021, and the compound annual growth rate in the next two years is expected to be only about 3%-4%.

However, the smart electric vehicle industry is another scene. After experiencing the decline of the automobile industry in 2019 and 2020, the new energy automobile industry ushered in an outbreak this year. According to the statistics of China Automobile Association, the sales volume of new energy vehicles in China in 2021 exceeded 3.52 million, a year-on-year increase of more than 160%, far exceeding industry expectations. And this achievement was completed under the circumstance that the automobile industry was generally "lack of core" this year. In addition, the market penetration rate of new energy vehicles in China will be 13.4% in 2021, and according to "New Energy Vehicle Industry Plan 2021-2035" issued by the State Council, the sales penetration rate of new energy vehicles in China will reach at least 20% by 2025, and the market space to be tapped is huge.

In addition, we compare the market size of smart phones and new energy vehicles, and we can find that the difference between the two markets is more obvious. According to Gartner’s calculation, in 2019, the size of China’s automobile and automobile aftermarket is about 10 times that of the mobile phone market. The smart electric vehicle business is expected to become a new performance growth point of the company in the future.

Chart 10: Global smartphone shipments

Source: IDC, Zheshang International

Chart 11: Sales of New Energy Vehicles in China

Source: China Automobile Association, Zheshang International.

2) Give full play to its own advantages and improve the business ecosystem.

Under the wave of intelligent electric vehicles, the automobile industry is transforming from machinery industry to information industry and consumer electronics industry. More than half of the bill of materials of the whole vehicle is electronic parts, and this proportion will be higher and higher, and the research and development costs will also focus on electronic parts in the future. As the global leader in smart phones and IoT intelligent hardware, Xiaomi has its inherent advantages in software and hardware ecology, supply chain resources and sales channels.

Based on the "1+4+X" IoT category strategy, Xiaomi has built the world’s largest intelligent hardware IoT platform. In "1+4+X", "1" refers to mobile phones, "4" refers to televisions, smart speakers, routers and notebooks, and "X" refers to various IoT products provided by eco-chain enterprises and cooperative enterprises. As the intelligent single product with the highest single value, the intelligent electric vehicle is expected to become a new important part of the IoT strategy, realize ecological synergy with other intelligent hardware, and give play to Xiaomi’s huge ecological user resource advantages.

Smart phones and smart cars have a certain overlap in communication, software and architecture, which is conducive to Xiaomi’s advantages in intelligent software and hardware accumulated over the years. In terms of software, for example, Xiao Ai’s students enter the car human-computer interaction system, MIUI’s in-vehicle service, etc., in terms of hardware, Xiaomi can give full play to the supply chain management advantages of intelligent hardware for many years, including supplier resources such as foundry companies and chip manufacturers. Considering the current shortage of automotive software technicians in the talent market, Xiaomi’s mobile phone department is also conducting regular technical exchanges with the automotive team, and even directly exporting software technicians to the automotive team.

The advantage of Xiaomi’s sales channel will be an important guarantee for the development of its smart electric vehicle business. Xiaomi Home will become an important scene for users to experience Xiaomi Automobile and assume an important role in the sales and service of Xiaomi Automobile. By October 2021, the number of Xiaomi Home’s stores had reached 10,000 (only 3,200 by the end of 2020), covering 95% of cities, 80% of counties and 4% of towns, and it is planned to reach 30,000 in the next three years. It is worth mentioning that in the future, in addition to the rapid spread of Xiaomi House in quantity, its high leveling effect is far superior to that of domestic peers.

Chart 12: Number of Xiaomi’s stores in Chinese mainland.

Source: Company Announcement, Zheshang International.

Chart 13: The store coverage of Xiaomi in Chinese mainland.

Source: Company Announcement, Zheshang International.

Consumer recognition of Xiaomi’s entry into the smart electric vehicle industry is also the basic disk for future business development. Before the official announcement of building the car, Xiaomi launched a poll in Weibo, and nearly 87% of the users who participated in the poll expressed their willingness to buy.

Chart 14: User Survey of Xiaomi Smart Electric Vehicle in Weibo

Source: Sina Weibo, Zheshang International.

2. Build an ecological moat with the core strategy of "mobile phone ×AIoT"

2.1. "Mobile phone ×AIoT" is Xiaomi’s strategic highland.

We mentioned above that in Xiaomi’s triathlon model, hardware business is regarded as the main way for the company to attract customers. Xiaomi promises that the comprehensive net profit rate of hardware business will not exceed 5%. Although the hardware profit level is lower than that of traditional hardware enterprises, such a strategy has unique advantages from the perspective of the company’s own positioning of Internet enterprises.

At present, Internet users in China have entered the era of stock competition, and the customer acquisition cost of Internet companies is increasing year by year. Taking the e-commerce industry with fierce competition in China as an example, we can see that the penetration rate of online shopping users has gradually peaked in recent years, and the growth of the number of online shopping users is under pressure. In addition, there are more and more newcomers in the industry, which has led to the increase in customer acquisition costs of major Internet e-commerce platforms year by year. Xiaomi’s model is another way. Relying on its cost-effective hardware, it not only attracts a lot of user traffic, but also achieves a "negative" customer acquisition cost, and then greatly improves user stickiness through its "1+4+X" hardware ecosystem. As an ecological strategy of Xiaomi’s hardware, "mobile phone ×AIoT" will be the core strategy of Xiaomi in the next decade, and its importance is equivalent to that of WeChat to Tencent.

Chart 15: The customer acquisition cost of major e-commerce platforms is increasing year by year.

Source: Iresearch, Zheshang International

Chart 16: The penetration rate of online shopping users has gradually peaked.

Source: Wind, Zheshang International

From the evolution of Xiaomi’s hardware ecological strategy, we can see the company’s vision of its hardware ecology in the future. From "All in IoT" in 2018 to "mobile phone+AIOT" in 2019, and then to "mobile phone ×AIoT" in 2020. We can see from these two strategic changes: 1) the strategic complementarity between smartphone as the core and AIoT; 2) Eco-chemical reaction from "mobile phone plus AIoT" to "mobile phone with AIoT". That is to say, with smart phones as the core, we will continue to make efforts to form a hardware ecosystem with AIoT, and with a variety of hardware devices and a massive user base, we will realize further data precipitation and ecological chain development, which in turn will feed back the virtuous circle of smart phones and AIoT services and take the lead in the future Internet of Everything era. At present, Xiaomi’s "mobile phone ×AIoT" strategy has achieved remarkable results, and it still maintains a strong growth momentum.

2.2. Smartphone business 21H1 exceeded expectations, and the upstream supply of Q3 was under pressure.

Xiaomi’s smartphone business revenue in 2021H1 reached RMB 110.6 billion (+78.5% YoY), and the strong growth of revenue was mainly due to the substantial increase of Xiaomi’s mobile phone shipments in the first half of the year (+77.9% YoY). Especially in 21Q2, the company’s smartphone revenue and global mobile phone shipments reached record highs, reaching 59.09 billion yuan (+86.8% YoY) and 52.9 million units (+86.9% YoY). According to Canalys data, with the global mobile phone shipments of 21Q2, the company’s global smartphone market share reached 16.7%, surpassing Apple’s first promotion to the second place in the world; The market share in the domestic smartphone market ranked third, rising to 16.8%(+6.5 ppts YoY).

In 2021Q3, due to the shortage of upstream core components, the global shipment of Xiaomi smartphones dropped from a high level to 43.9 million units (-5.8% YoY). Affected by this, Xiaomi’s smartphone business revenue in 2021Q3 only increased by 0.5% year-on-year to 47.8 billion yuan. In the same period, with the strong sales of iphone 13 series, Apple replaced Xiaomi and returned to the second place in the global smartphone market. In the domestic market, the surge of glory shipments in 2021Q3 also made Xiaomi’s market share in China drop to the fourth place. Although the shortage of upstream supply is difficult to completely improve in the short term, we still believe that the shipment of Xiaomi smartphone 2021Q4 is expected to pick up with the help of domestic and international promotion activities in the fourth quarter.

Chart 17: Quarterly Revenue of Xiaomi’s Smartphone Business

Source: Company Financial Report, Zheshang International.

Chart 18: Global shipments of Xiaomi smartphones

Source: Company Financial Report, Zheshang International.

2.2.1. Xiaomi’s globalization strategy has achieved remarkable results.

With the negative growth of domestic smartphone shipments year by year, it is inevitable for Xiaomi to accelerate the pace of globalization. We counted the changes of domestic mobile phone shipments from 2012 to 2020, and found that domestic mobile phone shipments reached a high point in 2013, and the annual shipments in 2014 shrank by nearly 22% year-on-year. After a slight rebound in 2015 and 2016, domestic mobile phone shipments have maintained a decreasing trend year by year. Xiaomi reached the top of the domestic smart phone market in 2014Q2, and started globalization in the same year, which just echoed the trend change of the domestic mobile phone market at the time point.

Chart 19: Domestic Mobile Phone Shipments

Source: Wind, Zheshang International

At present, the globalization of the company has achieved remarkable results. The company’s 21H1 revenue in overseas markets reached 81 billion yuan, maintaining a strong growth (+65.9% YoY), accounting for 49.2% of the total revenue. Among them, 21Q2′ s overseas income reached a record high, reaching 43.6 billion yuan (+81.6% YoY), accounting for 49.7% of the total income (+1.05 ppts qoq). According to Canalys data, in 2021Q2, Xiaomi ranked in the top five in 65 markets around the world, among which it ranked first in 22 markets. Moreover, 10 of them ranked first for the first time, showing the strong growth of Xiaomi in overseas markets.

In 2021Q3, the proportion of Xiaomi’s overseas income continued to increase, and the proportion of Xiaomi’s total income increased to 52.4%. Affected by the decline in global smartphone shipments, Xiaomi’s smartphone market share has declined in some parts of the world. In 2021Q3, Xiaomi ranked first in 11 countries and regions around the world, and ranked in the top five in 59 countries and regions around the world. In some overseas countries and regions, the carrier channel is the mainstream of mobile phone sales. In 2021Q3, the shipment of Xiaomi smartphones in overseas carrier channels exceeded 6.8 million units, a year-on-year increase of over 130% (excluding the Indian market).

It is worth mentioning that as the first stop for Xiaomi to go to sea in 2014, the success of the Indian market can be said to be the epitome of Xiaomi’s success in overseas markets. In 2017Q4, it only took Xiaomi more than three years in India to achieve the first shipment in the Indian smartphone market, with a market share of 26.8%. Since then, as of 2021Q3, Xiaomi has maintained the first market share in the Indian smartphone market for 16 consecutive quarters.

With the continuous expansion of Xiaomi in overseas markets, the company aims to hit the throne with the largest global market share in the next five years.

Chart 20: Regional proportion of Xiaomi smartphone shipments

Source: Company Financial Report, Zheshang International.

Chart 21: Regional Structure of Xiaomi Group’s Total Revenue

Source: Company Financial Report, Zheshang International.

2.3. AIoT builds the era of Internet of Everything, and Xiaomi has taken the lead.

Xiaomi’s AIoT is the artificial intelligence Internet of Things, which is the technical integration of AI (artificial intelligence) and IoT (Internet of Things). We believe that the essence of AIoT is a data-based ecosystem. The IoT of the Internet of Everything promotes the development of AI through its huge data precipitation, which in turn realizes a smarter IoT Internet of Everything and realizes a virtuous circle.

The AIoT industry is currently in a period of rapid development. According to the data of IoT Analytics, the global market size of the AIoT industry is expected to reach a compound growth rate of 29% from 2020 to 2023. In view of the huge market scale and sustained strong growth momentum of the AIoT industry, new players are constantly pouring in, especially mobile phone manufacturers with Internet of Things portals, which have launched their own IoT strategies, such as Huawei’s "1+8+N" strategy, the IoT open ecological alliance established by vivo through Jovi IOT, and OPPO’s "Building a Three-Circle Model".

Chart 22: Global AIoT Industry Market Size

Source: IoT Analytics, Zheshang International

Xiaomi, as the early layout of the AIoT track, has already taken the absolute lead. Since the layout began in 2013, it has built the world’s largest consumer AIoT Internet of Things platform company. By the end of Q3, 2021, the number of IoT devices connected by Xiaomi has exceeded 400 million, and it can still maintain a high growth rate of 33% year-on-year, among which the number of users with five or more devices is as high as 8 million, with a year-on-year growth rate of 43%. In addition, in 2021Q3, the monthly users of Xiaoai classmate and Mijia APP reached 110 million and 60 million respectively, up by 34% and 39% respectively.

Chart 23: Connection number of Xiaomi IoT devices

Source: Company Financial Report, Zheshang International.

Chart 24: Number of users with 5 or more devices

Source: Company Financial Report, Zheshang International.

Chart 25: Xiao Ai classmate MAU

Source: Company Financial Report, Zheshang International.

Chart 26: Mijia APP MAU

Source: Company Financial Report, Zheshang International.

Benefiting from the hot sales of various IoT products, the company’s IoT and Consumer Products Division 2021H1 achieved revenue of 39 billion yuan (+38% YoY), of which Q2 reached 20.74 billion yuan (+36% YoY). It is worth mentioning that Xiaomi’s IoT business has grown strongly overseas. In 2021Q2, the revenue of overseas IoT and consumer products increased by 93.8% year-on-year, and the growth rate was significantly higher than the domestic market. Among them, electric scooters, smart bracelets and other categories have become popular explosions in overseas markets. In 2021Q3, affected by panel price increase and overseas shipping logistics, the business growth rate slowed down to 15.5% year-on-year, and the revenue was 20.9 billion yuan. The company expects that the problem will be alleviated in 2022 and has confidence in restoring the previous strong growth momentum.

Chart 27: Quarterly Revenue of Xiaomi IoT and Life Service Products Business

Source: Company Financial Report, Zheshang International.

As an important eco-portal hardware, Xiaomi TV, Xiaoai speaker, Xiaomi notebook and Xiaomi router are all in an important position in the industry.

According to the statistics of Aowei Cloud, by the end of 2021Q3, the shipments of Xiaomi TV in Chinese mainland ranked first for 11 consecutive quarters, and the global smart TV shipments ranked in the top five. In terms of smart speakers, according to IDC data, the domestic smart speaker industry is highly concentrated. In 2020, the industry Top3 accounted for nearly 96% of the total, and Xiaomi ranked in the top three, with a market share of 27%.

As the core of intelligent hardware data transmission, router plays an important role in Xiaomi’s AIoT ecology. In 2020, the global shipment of Xiaomi router exceeded 15 million units, and in 2020Q4, it was the second in Chinese mainland, with a market share of 20.6%. In 2021, the sales volume of Xiaomi router exceeded 20 million. In addition, according to ZDC’s statistical survey, in 2021, the brand attention of Xiaomi router in the domestic wireless router market was second only to Huawei and TP-LINK, ranking third in the industry.

In addition to the basic functions of the router, Xiaomi constantly strengthens the position of the router as the data transmission hub of intelligent hardware. By developing various new functions related to Xiaomi’s intelligent devices, it enhances the synergy effect of Xiaomi’s AIoT ecology, the user experience of hardware devices and the user’s stickiness to the ecology. For example, the router with the function of "Xiaomi carefree connection" is equipped with an independent AIoT antenna. With Mijia APP, you can automatically find Xiaomi intelligent hardware devices that are not connected to the network. You can configure the network with one button without entering a password or complicated settings, which greatly reduces the learning cost of configuring Xiaomi AIoT ecology, and it is easy for the elderly and children at home to operate. There is also the "WiFi encryption synchronization" function of the router. After the router modifies the WiFi password, it will synchronize the new password to all Xiaomi smart devices, and the devices will automatically connect to the router with the new password without resetting the distribution network one by one. This is a great improvement in the user experience at the moment when there are more and more types of Xiaomi AIoT ecological hardware devices.

Chart 28: Xiaomi carefree company

Source: Xiaomi Mall, Zheshang International.

Chart 29: WiFi encryption synchronization

Source: Xiaomi Mall, Zheshang International.

Compared with the saturation of the global smart phone market and the uncertain smart electric vehicles, we believe that Xiaomi AIoT will be an important driving force for the future growth of Xiaomi’s performance. According to the company’s estimation, the volume of the company’s overseas IoT market is expected to reach three to four times that of the China market in the future. At present, the revenue of the company’s AIoT business accounts for about 25%-30%. With the further development of the AIoT business overseas, its revenue share is expected to increase in the future. This also echoes Lei Jun’s prediction that "in the next decade, the proportion of IoT business of Xiaomi Company is expected to reach 40%-50%" at the Xiaomi IPO meeting in 2018. In addition, the gross profit margin of the company’s overseas IoT business is higher than that of China, which is conducive to promoting the overall gross profit margin of the company.

2.3.1. "Bamboo Forest" effect breeds AIoT ecology.

Xiaomi has built the world’s largest AIoT platform ecosystem, and its current number of device connections and monthly users of software can still maintain a strong growth of at least 30%, which is inseparable from Xiaomi’s continuous investment and cultivation in the AIoT ecological chain. Its investment and cooperation mode with the "millet ecological chain" enterprises is also talked about, which is called "bamboo forest effect".

In Xiaomi’s official work "Notes on Xiaomi Ecological Chain Battlefield", it is mentioned that the "evergreen foundation" of traditional enterprises is more like a century-old pine tree, which not only needs years of accumulation, but may be uprooted once it encounters strong winds and waves; In the rapidly changing Internet era, just a few years may determine the fate of a company, just like a bamboo, its life cycle is very short. However, bamboo is transformed into a bamboo forest by the way of "ecological chain". Although the life cycle of each bamboo is not long, this bamboo forest is constantly growing through continuous incubation and renewal iteration.

When Xiaomi built its own ecological chain, it followed this thinking. Through the mode of investment and cooperation, a large number of intelligent hardware companies entered the "Xiaomi Ecological Chain" and quickly occupied their respective sub-segments by making explosions. By the end of 2021Q2, Xiaomi had invested in more than 330 companies, among which many early eco-chain enterprises had become the industry leaders and listed on the capital market, such as Huami Technology, which focuses on smart wearable devices, Yunmi Technology, which is the manufacturing and research of small household appliances, and No.9 robot of robot products.

Specific to the mode of cooperation and incubation with eco-chain enterprises, Xiaomi generally shares in eco-chain enterprises through the investment principle of "holding shares but not holding shares", regards the investment enterprises as "brother companies", conducts business in a cooperative way, and helps eco-chain enterprises to create explosives and quickly occupy their respective sub-tracks through Xiaomi’s own advantages in supply chain, products and brand channels.

1) in the supply chainWith its advantages in sales volume, Xiaomi has a strong bargaining power in the supply chain, which may help eco-chain companies reduce procurement costs in terms of common parts;

2) In terms of productsXiaomi will deeply participate in the early product definition and design to ensure the overall harmony of the tonality of the ecological chain products. Some intelligent hardware products can also access the Xiaomi smart home ecology through Mijia APP;

3) In terms of brand channelsThe products of eco-chain enterprises can not only save a lot of brand marketing expenses with the help of Xiaomi’s brand advantages, but also enter various sales channels of Xiaomi. Online channels include Xiaomi official website, Xiaomi Youpin and third-party e-commerce platforms, while offline channels include Xiaomi Home with over 10,000 households.

In recent years, with the continuous growth of eco-chain enterprises, some excellent enterprises, such as Roborock, have been listed on the capital market. In order to strengthen the control of their own supply chain and get rid of the cost-effective positioning of products from Xiaomi, some eco-chain companies that have successfully grown or even listed have begun to appear the voice of "going to Xiaomi".

However, considering that Xiaomi invested in shares as a "brother company" from the very beginning, and Xiaomi is still an important shareholder, we believe that "de-Xiaomi" is only a move towards high-end branding in the later development process, and the continuous integration with Xiaomi’s AIoT ecology will continue, and Xiaomi will also benefit from the investment income brought by the long-term growth of eco-chain companies. In this process, eco-chain enterprises have met consumers’ demand for high-end intelligent hardware and completed the high-end of their own brands, which in turn is conducive to Xiaomi’s gradual getting rid of the label of "cost performance" and boosting the high-end of Xiaomi in terms of ecology and channels.

3. Internet service is the core of ecological realization and profit.

As mentioned in Xiaomi’s triathlon model above, Xiaomi’s Internet service business undertakes the huge traffic brought by "hardware+new retail", and provides various Internet value-added services such as user advertisements, games and financial technology with MIUI operating system as the carrier.

The reason why the Internet service business is the core of Xiaomi’s ecological realization and profitability is that although the income of the Internet service business is relatively small compared with other business segments, it benefits from the high gross profit level of the Internet service business, and its gross profit level plays a very important role in the overall gross profit of the company, which has improved the profitability of the whole company. Taking the latest 2021Q3 performance as an example, the company’s Internet service business revenue only accounts for 9.4% of the total revenue, while gross profit accounts for 37.8% of the company’s total gross profit. This is due to the fact that the gross profit margin of the Internet service sector far exceeds that of other sectors. The gross profit margin of the Internet service sector is as high as 74%, while the gross profit margins of smartphones, IoT and life service products and other sectors are only 13%, 12% and 18%. The lower hardware gross profit margin is also in line with the positioning of cost-effective drainage.

Chart 30: Revenue proportion of each business segment in 2021Q3

Source: Company Financial Report, Zheshang International.

Chart 31: Gross profit ratio of each business segment in 2021Q3

Source: Company Financial Report, Zheshang International.

Internet service business is an important point in Xiaomi’s recent performance. With the continuous growth of the number of MIUI users at home and abroad, the revenue of Xiaomi Internet service in 2021Q3 reached 7.34 billion yuan, a substantial increase of 27% year-on-year and a continuous increase of 4% quarter-on-quarter. The revenue of the segment kept hitting record highs in the first three quarters of 2021. Among them, overseas revenue reached a new high, with a year-on-year growth of over 110% in 2021Q3, accounting for nearly 20% of the sector revenue. In addition, with the strong growth of Xiaomi’s advertising business against the trend, the structural changes in Internet service revenue have made its gross profit margin stand at a new level of more than 70% this year.

Chart 32: Quarterly Revenue of Xiaomi’s Internet Service

Source: Company Financial Report, Zheshang International.

From the perspective of the relationship between quantity and price of Internet services, the strong growth of Internet services is mainly attributed to the strong growth of the number of MIUI users. Corresponding to the strong growth of smartphone shipments since 2020Q3, the number of monthly accounts of MIUI has also rebounded in the same period. By 2021Q3, the number of monthly active users of MIUI reached 486 million (+32% YoY), a record high. And on November 22, 2021, MIUI’s global monthly activity exceeded 500 million, which became another important milestone for Xiaomi.

In contrast, the ARPU of Internet services in 2021Q3 decreased slightly by 4% year-on-year to 15.1 yuan. Mainly due to the rapid increase in the proportion of Xiaomi’s overseas business, the growth of overseas MIUI users is strong. However, the ARPU of overseas markets is still significantly smaller than that of domestic users, so the change of user structure leads to a decline in the overall ARPU. However, with the continuous deepening of Xiaomi in overseas markets in the future, we believe that the overall ARPU is expected to pick up in the future.

Chart 33: Number of monthly active accounts of MIUI

Source: Company Financial Report, Zheshang International.

Chart 34: ARPU of Internet Service Quarterly

Source: Company Financial Report, Zheshang International.

Dismantle Xiaomi’s Internet service business, which is mainly divided into three parts: advertising revenue, game revenue and other value-added service revenue (mainly composed of Internet finance and the income of the product e-commerce platform). Internet service revenue is mainly contributed by advertising business. In 2021Q3, advertising business realized revenue of 4.8 billion yuan, accounting for nearly 65%, while the revenue from games and other value-added services accounted for 14% and 21% respectively.

Chart 35: Revenue Ratio of Internet Services

Source: Company Financial Report, Zheshang International.

1) Advertising businessAdvertising business includes effect and brand advertising, search advertising and pre-installed advertising. As the business with the largest proportion of revenue in Internet services, relying on the huge hardware ecosystem, Xiaomi firmly grasps the traffic portal. Massive user data and complete ecology make advertising marketing more scene-oriented, intelligent and accurate, and its gross profit margin is as high as 80%. In the context of weak macro consumption and the stall of Internet advertising business of giants such as Ali Tencent, Xiaomi’s advertising business continued to maintain strong growth in 2021. In Q3 2021, Xiaomi’s advertising revenue was 4.8 billion yuan, a record high, with a strong year-on-year growth of 45%. The increasing proportion of advertising revenue has also raised the gross profit margin level of the entire Internet service sector.

2) Game businessGame business income mainly comes from mobile game distribution channels and svip system of Xiaomi Game Center. In 2021Q3, the revenue of Xiaomi’s game business increased by 25% year-on-year to 1 billion yuan, mainly due to the excellent performance of fine new games and the higher average game revenue per user brought by the growth of high-end mobile phones and game mobile phone users. According to the company’s disclosure, the average game revenue of high-end and gaming mobile phone users reached 4 times and 5 times of the average level respectively. With the steady progress of Xiaomi’s high-end mobile phone strategy, the game business revenue is expected to usher in further growth.

3) Other value-added servicesOther value-added services are mainly composed of Internet finance and quality e-commerce platforms. In 2021Q3, the revenue was 1.6 billion yuan, a slight decrease of 4.3% year-on-year. Mainly because the company continues to actively control the scale of financial technology business and strengthen its risk control capabilities. In terms of products, Xiaomi launched a new consumer brand "Daily Elements" around daily life scenes in 2020Q2, and launched the UP paid membership system in November to continuously improve users’ online consumption experience.

4. The strategy drives the success of the enterprise, and there is much to be done in the short term.

To sum up, we think Xiaomi is an excellent enterprise driven by strategy. From the macro-advanced layout of the high-quality potential track (betting on the smart phone track at the beginning of its establishment, laying out the loT industry one step ahead in 2013, and announcing its entry into new energy vehicles in 2021); Strategic planning of the company’s ecology (including the core strategy of "mobile phone ×AIoT", the category strategy of "1+4+X" and the "bamboo forest strategy" in investment) from the enterprise level; From microcosmic concrete to the "explosive product strategy" of products, the methodology is summarized from the aspects of products, design and marketing, which makes "explosive products" reproducible.

Although the performance of Xiaomi in 2021Q3 is under pressure due to various short-term factors such as supply chain and logistics, we are still strongly optimistic about the company’s long-term development in the future. We can see that although the temporary growth of hardware shipments is under pressure, the number of users in Xiaomi Ecology (such as the number of MIUI users, the number of students living in Xiaoai and the number of people living in Mijia APP) still maintains a fairly steady and rapid growth, which can show the stickiness of Xiaomi Ecology to users, and the unexpected growth of Internet services as the core of profit is a good proof of this view. In the future, with the further expansion of Internet service business overseas and the improvement of overseas ARPU level, the Internet service sector will usher in further growth, which is expected to further highlight Xiaomi’s Internet enterprise attributes and consolidate its valuation foundation.

However, it is undeniable that the engine of Xiaomi Ecology is still at the hardware level, and the product strength of mobile phone products will still be the focus of the company itself and market investors in the future. At the moment when products in the industry are homogeneous, we think that product strength can be summarized as follows: 1) product differentiation and quality, 2) excellent brand influence and 3) complete hardware ecology. These points can also be used for investors to focus on when observing the performance of Xiaomi market for a long time.

1) product differentiation and quality.In terms of differentiation, Xiaomi’s mobile phone technology is abundant. In the past, the first generation of Mix led the industry’s comprehensive screen boom. In 2021, Mix4 equipped with an off-screen camera earned the public’s attention. In terms of quality, we believe that it is important to "make no mistakes". In the development of domestic mobile phones, there are many precedents that failed because of defects in design, quality and performance. With the continuous growth of mobile phone shipments, Xiaomi is expected to further enhance its voice in the supply chain and is expected to do better in design and quality control.

2) Excellent brand influenceBrand is not only the label of product characteristics for users (such as Xiaomi’s "cost performance"), but also an important consideration for users to find value recognition and their own social labels. Xiaomi’s cost-effective label in the past has won most people’s love, but the dual-brand and high-end strategy in the future is an important point of view. We have seen that Xiaomi mobile phone has now stabilized the mid-to high-end market and further launched an offensive to the higher price segment.

3) Complete hardware ecologyA complete hardware ecosystem not only gives users a complete user experience through the interconnection between hardware, but also greatly enhances the user’s stickiness. Xiaomi has the largest AIoT hardware ecosystem in the world, which is undoubtedly an important strength of Xiaomi, and the subsequent polishing in experience will be the focus.

5. Profit expectation and valuation

5.1. Profit expectation

We predict that the revenue of Xiaomi Group in the next three years (2021E, 2022E and 2023E) will increase by 32%, 22% and 20% respectively, reaching RMB 325.6 billion, RMB 396.8 billion and RMB 476.2 billion. The company’s 2021Q3 results have been announced. Combined with the strong performance growth in the first half of this year, we expect the annual revenue growth in 2021 to be as high as 32% year-on-year. In the next two years, combined with many uncertain factors such as epidemic situation, supply chain and market competition, and taking into account Xiaomi’s future high-end promotion and potential in overseas markets, we believe that the overall revenue growth level of the company will decline in 2022 and 2023, but it can still maintain steady revenue growth.

Chart 36: Xiaomi’s revenue is expected to maintain rapid growth in the next three years.

Source: Company Financial Report, Zheshang International Forecast.

In terms of business segments, it is estimated that the overall revenue structure of the company in 2021E/2022E/2023E will not change much compared with that in 2020. Among them, the smart phone business will still be the main source of the company’s revenue (estimated to account for 64%/63%/62% respectively). With the rapid growth of loT and consumer products business, the revenue share of smart phone business is expected to decrease slightly.

1) Smart phone business: We predict that in 2021E/2022E/2023E, the smartphone business will achieve revenue of 2077/2508/2963 billion yuan respectively, with year-on-year growth rates of 36%/21%/18% respectively. In the future, the growth of smartphone shipments and the promotion of ASP will still be the main driving forces for revenue growth. Shipments will benefit from the high growth in the first half of 2021, and the growth rate will slow down in the next two years under uncertain factors such as upstream supply pressure, epidemic situation and market competition; We expect ASP to continue to grow steadily under Xiaomi’s high-end strategy, and it is expected to continue to raise the gross profit margin of the sector.

2)loT and consumer products: We estimate that the revenue of LOT and consumer products business in 2021e/2022e/2023e will reach 848/1081/135.1 billion yuan respectively, with a year-on-year growth rate of 26%/28%/25% respectively. It is expected that the hardware products of Xiaomi AIoT will continue to be under the pressure of upstream supply shortage and overseas logistics in the early 2022, but considering the huge overseas market and the good user stickiness of Xiaomi’s ecology, we expect the sector to maintain steady and rapid growth in the future.

3) Internet servicesInternet business is expected to remain the most important profit point of the company. We expect that the revenue of 2021E/2022E/2023E loT and consumer products business will reach 281/33.4/39.5 billion yuan respectively, with year-on-year growth rates of 18%/19%/18% respectively, and the gross profit margin will remain above 70%. Although the company’s advertising business has performed strongly in recent performance, considering the overall macroeconomic downturn in China, we expect the growth rate of the company’s advertising business to slow down in 2022. Combined with the recovery of the game business, the gross profit margin level may fall back, but the overall sector revenue will still maintain a steady growth of around 20%.

4) Others: We estimate that other income in 2021E/2022E/2023E will be 5/45/54 billion yuan, with year-on-year growth rates of 98%/-10%/20% respectively. Other income of the company increased by 194% in 2021Q3, mainly due to the sale of office buildings and materials, and it is expected that there will still be similar one-time income in 2021Q4. Therefore, considering the high base of the previous year, it is expected that the plate revenue will decline in 2022.

Chart 37: The revenue scale forecast of Xiaomi’s business segments in the next three years.

Source: Company Financial Report, Zheshang International Forecast.

Regarding the company’s 2021E/2022E/2023E expenses, we expect that the company’s sales expense ratio will continue to increase slightly in the future, in line with the company’s high-end and new product marketing; In terms of administrative expenses, we expect that the expense ratio will basically maintain the current level; In terms of R&D expenses, it is expected that the company will continue to increase R&D investment in the future, and the R&D expense ratio will rise steadily in the future.

To sum up, we predict that the net profit of the company in 2021E/2022E/2023E will reach 206/225/268 million yuan respectively, and the EPS of the corresponding company in 2021E/2022E/2023E will reach 0.80/0.88/1.04 yuan.

Chart 38: Expense Rate Level of Xiaomi Group

Source: Company Financial Report, Zheshang International Forecast.

Chart 39: Net profit level of Xiaomi Group’s homecoming

Source: Company Financial Report, Zheshang International Forecast.

5.2. Valuation and investment suggestions

In terms of valuation, we selected nine comparable companies at home and abroad, among which Samsung, Apple and Chuanyin are well-known smart phone companies at home and abroad, Roborock and Cobos are intelligent hardware companies, and Tencent, Ali, Baidu and Google are typical Internet companies at home and abroad. We use P/E to value Xiaomi Group. According to the current average price-earnings ratio of 21.2 times that of comparable companies in 2022E, the target price of Xiaomi Group is HK$ 23.09. The target price is 78% higher than the current share price of HK$ 12.94, so we give Xiaomi Group a buy rating for the first time.

Chart 40: Comparison of Valuation of Related Comparable Companies

Note: Data as of March 8, 2022.

Source: Bloomberg, Zheshang International

6. Financial statements

Chart 41: Income Statement

Source: Company Financial Report, Zheshang International Forecast.

Chart 42: Balance Sheet

Source: Company Financial Report, Zheshang International Forecast.

Chart 43: Cash Flow Statement

Source: Company Financial Report, Zheshang International Forecast.

This article comes from "Zheshang International Financial Holdings Co., Ltd." WeChat WeChat official account; Zhitong Finance Editor: Wenwen.

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