On December 12th, in U.S. Eastern Time, the U.S. Securities and Exchange Commission (SEC) announced that Huami Technology, a company under Xiaomi's ecosystem, had filed an IPO prospectus. This document indicates that no specific pricing has been set yet. According to the filing, Huami reported revenue of 1.296 billion yuan for the first three quarters of 2017, with a net profit of 95.37 million yuan. In the same period in 2016, revenue was 943 million yuan, and annual revenue reached 1.556 billion yuan, with a net profit of 23.94 million yuan. The company recorded a loss of 19.04 million yuan during the same period in 2016. In Q3 2017, revenue hit 474 million yuan, representing a 27% year-over-year increase but a 3% drop compared to the previous quarter.
The shareholder structure reveals that Huang Wang, the CEO of Huami, holds 39.4% of the shares, making him the largest individual shareholder. Shunwei Capital follows with 20.4%, and the Xiaomi Fund, People Better Limited, owns 19.3%. Meanwhile, a company controlled by Lei Jun holds 39.7%, slightly higher than Huang Wang’s stake.
Huami was founded on December 27, 2013, as a joint venture between Xiaomi and Hefei Huaheng Electronics, focusing on smart wearable devices. In 2014, it received significant investment from Lei Jun and Shun Capital. Products like the Mi Band and Mi Smart Scale were developed by Huami. Additionally, the company has its own brand, Amazfit, offering products such as the Amazfit sports watch series and the Oclean smart toothbrush.
According to the prospectus, Xiaomi-branded products make up a large portion of Huami’s revenue. In the first three quarters of 2017, sales of Xiaomi-branded items, including the Mi Band, totaled 106.8 million yuan, accounting for 82.4% of total revenue. Revenue from its own brand, Amazfit, was 34.23 million yuan, or 17.6%.
In the risk section, Huami warns that Xiaomi is its most important customer and distribution channel. A deterioration in their relationship or a decline in Xiaomi wearable product sales could have a material adverse effect on Huami’s performance. As of September 30, 2017, sales of Xiaomi wearables contributed 97.1%, 92.1%, and 82.4% of Huami’s revenue, respectively.
Huami also emphasizes the importance of commercialization, stating that failure to develop and launch new products, services, and technologies could negatively impact business results. The company’s growth depends on its ability to introduce new generations of existing product lines and innovative smart wearable technologies with enhanced features and value-added services. This highlights the need for greater efforts in independent innovation and brand management.
With the potential listing of Xiaomi Ecological Chain companies before Xiaomi itself, this move could enhance Xiaomi’s overall valuation and influence market pricing. As the tech sector continues to evolve, Huami’s IPO marks a significant step in its journey toward greater independence and market recognition.
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