Stone Science And Technology Board Will Lead To The Breakthrough Of Millet Ecological Chain Enterprises?

On the evening of November 20th, the official website of the Shanghai Stock Exchange showed that the Beijing Municipal Development Committee of the science and Technology Board agreed to issue the stone century Polytron Technologies Inc (hereinafter referred to as "stone technology").

After receiving more than half a year's acceptance, after four rounds of inquiries, stone technology, a typical millet ecological chain enterprise, finally succeeded.

In fact, it was only 5 years since its establishment in July 4, 2014, but it has been 3 years since its launch of the first product millet customized brand "Mi Jia intelligent sweeping robot" in September 2016. In 2016, in just 3 years in -2018, stone technology realized the explosive growth of revenue from 183 million yuan to 3 billion 51 million yuan.

However, as a result, the association with millet has become a matter of repeated supervision and supervision until the listing committee meeting.

At the same time, the problem of low gross margin and patent independence has also become a problem that it has to face in the ecological chain mode.

At present, stone technology is gradually "going to millet", with the launch of its own brand products and sales increase, the proportion of affiliated transactions with millet group has been gradually reduced, and gross margin has also been improved. On the other hand, Xiaomi group has begun to enter intelligent hardware products. Under the problem of patent independence, the breakthrough of stone technology is still facing many challenges.

Millet ecological chain enterprises

Barbarism is not enough to describe stone technology.

According to the latest prospectus, the main business of stone technology is the design, R & D, production and sale of intelligent hardware such as intelligent cleaning robot. The main products are millet customized brand "Mi Jia intelligent sweeping robot", "mica hand-held wireless cleaner", and its own brand "stone head intelligent sweeping robot" and "small tile intelligent sweeping robot".

In September 2016, stone technology launched the first product, the millet customized brand "Mi Jia intelligent sweeping robot", and its performance has been booming since 2016. The operating income of -2018 in 2016 was 183 million yuan, 1 billion 119 million yuan and 3 billion 51 million yuan respectively, and the operating income growth rate in 2017 and 2018 was 510.95% and 172.72% respectively.

This is almost unimaginable speed in traditional industries. And the growth of this performance can not be separated from its identity as an ecological chain enterprise of millet.

Millet was widely known for its mobile phones. In fact, millet not only makes mobile phones, but also "makes" companies.

Lei Jun, founder and chairman of Xiaomi group, said at the November 19th millet 2019 developers conference that under the guidance of the dual engine strategy of "mobile +AIoT", millet will continue to promote the "5G+AIoT" next generation super Internet as part of the public life. The AIoT part of it can not be separated from many ecological chain enterprises. As of June 30th this year, millet IoT platform connected 196 million devices, an increase of 69.5% over the same period, with 5 or more millet IoT platform equipment, the number of users reached 3 million, an increase of 78.7% over the same period.

As of June 30, 2019, millet invested more than 270 companies, with a total book value of about 28 billion 700 million yuan. In these eco chain enterprises, more than 100 companies focus on intelligent hardware and consumer goods, of which China and Mickey have been listed in the United States last year. Stone technology is the typical representative of millet ecological chain enterprise sprint.

According to the prospectus, the cooperation mode between millet and ecological chain enterprises is mainly as follows: in the process of cooperation between millet and ecological chain enterprises, ecological chain enterprises purchase core raw materials by themselves or purchase raw materials through millet, and entrust foundry manufacturers to produce relevant hardware products according to their requirements.

In this process, the strong brand and channel advantages of millet enabled the eco chain enterprises to quickly open sales volume at the initial stage of creation, but at the same time, ecological chain enterprises also had a serious dependence on millet.

Prospectus shows that in 2016 -2018, the first major customers of stone technology were Xiaomi group. In the three years, the sales amount to millet group was 183 million yuan, 1 billion 11 million yuan and 1 billion 529 million yuan respectively, accounting for 100%, 90.36% and 50.17% of their main business income respectively.

Highly dependent on millet, the low gross margin of "Mi Jia" products also lowered the gross profit margin of stone technology.

Prospectus shows that in 2016 -2018, the gross profit margin of stone technology was 19.21%, 21.64% and 28.79%, respectively. Although the gross profit margin of stone technology has been rising along with the rise of private brand share, it still remains lower than other companies in the same industry.

Public information shows that the average gross profit margins of Ecovacs and FOMART in the same industry in 2016 were 37.94%, 34.08% and 48.14% respectively in -2018.

Where is the way to break through?

In the four round of inquiry, the relationship with millet group has always been the focus of the inquiry. This is also extended to the municipal Party committee's review conference.

In November 20th, the listing committee further asked whether the future R & D investment would focus on the relationship between private brand and rice brand, the ownership of patent ownership in future R & D investment, and the possible impact on cooperation between the issuer and millet.

For stone technology, which relies on ODM (ORIGINAL DESIGN MANUFACTURER) business, technology can be regarded as the core of competitiveness. And the patent is the key.

Prior to several rounds of inquiries, stone technology revealed that at present, stone technology and millet have 59 domestic patents and 5 overseas patents. According to the agreement on business cooperation signed by the company and millet, both parties have the right to implement their own common intellectual property rights without having to notify the other party and share the proceeds. The above clause guarantees the right of the company to use the common intellectual property rights. At the same time, according to the above agreement, neither party shall assign or license the intellectual property rights to the third party without the prior consent of the other party.

However, Xiaomi has the right to use patents independently to produce related products. If millet is to be used alone in the future, a total of patented production of intelligent floor sweeping robot products will affect the company's revenue and gross margins to some extent.

For patents sharing with stone technology, will millet alone use its own patent production intelligent sweeping robot product?

In November 20th, Xiaomi did not respond to the twenty-first Century economic report reporter.

An interesting detail is that, in the latest version of the prospectus, stone science and technology in the latest version of the prospectus will be classified as millet eco chain enterprises, and intelligence nine in the two round of inquiry reply clearly stated that "the company's cooperation with millet group includes millet group's financial investment to the company and millet group as one of the main channels of the company to sell customized products. The company maintains independence in assets, personnel, finance, institutions, business and so on. The company does not belong to the typical ecological chain enterprises defined by the millet group". Its key point is that the company maintains independence in intellectual property rights, and the cooperation between millet group and ecological chain enterprises in the field of intellectual property ownership is significantly different. "Nine" The company is independent in terms of intellectual property rights, and the company owns the intellectual property rights and the company is the sole owner. There are no common intellectual property rights in and out of the company. For the company's intellectual property rights, millet group did not provide technical and financial support to the company. The company has the right to use it or transfer it to the third party without authorization.

Stone science and technology prospectus also mentioned millet ecological chain enterprises operating the same or similar business risks.

Like many other eco chain enterprises, stone technology also relies on intelligent hardware.

Prospectus shows that during the reporting period, the proportion of revenue generated by the company's intelligent sweeping robots and their accessories accounted for 100%, 100%, 99.88% and 94.24% respectively. In addition to the company, the Yunnan ecological chain enterprise cloud rice technology also produces and sells intelligent sweeping robot, belonging to the same or similar business with the issuer. If the scale of the sale of intelligent ground sweeping robots in the ecological chain enterprises continues to increase, and the company can not continuously provide high-quality products and services in a timely manner according to market demand in the competition, the company's business performance may be affected.

According to the prospectus, in recent years, with the launch and sales of private brands, the sales volume of stone technology to Xiaomi group is decreasing year by year.

On the other hand, changes are also taking place. Recently, millet has launched its own brand products in two fields of smart watches and air conditioners. Previously, the production of millet bracelet and millet air-conditioning mainly depends on the ecological chain enterprises such as Hua Mi technology and Chi Mi technology.

"Millet growth space is shrinking rapidly, if we do not enter the ecosystem market, we will not be able to maintain the basic growth rate. Millet and ecosphere enterprises are basically the relationship between mutual utilization, and there is no too deep foundation. The future development of millet ecosystem will not be very smooth. On the one hand, the rapid growth of fertilizer is likely to happen immediately by millet and breaking away from millet. Because growth is based on the exchange of interests with millet rather than in the market, so these enterprises will soon face obstacles if they are directly competing with millet. Xiang song capital executive director Shen Meng thinks.