Xiaomi Corporation bought 65,168,803 shares of TCL Corporation

Jan 9, 2019

According to an official press release, Xiaomi bought 65,168,803 shares, or 0.48 percent, of TCL Corporation (“TCL Corp.”, ‎SZSE‎: 000100) from Shenzhen Stock Exchange’s secondary market on January 4.

On December 29, 2018, Xiaomi signed a strategic cooperation agreement with TCL Corp. to carry out joint research and development on the integration of high-end basic components of intelligent hardware and electronic information core. The agreement also means both parties will innovate the application of new device technology in the next generation of intelligent hardware, to establish cooperation and joint investment in the core, high-end and fundamental technology fields in order to constantly improve Xiaomi’s global customer experience. Besides, Xiaomi is interested in forming a strategic cooperation with TCL Corp. on core, high-end and fundamental technology fields at a capital level.

Xiaomi Founder, Chairman and CEO Mr. Lei Jun said, “I would like to express my admiration for Mr. Li Dongsheng, the Chairman of TCL Corp., because under his leadership, TCL has flourished and is now one of the world’s leading enterprises in technological innovation and operational efficiency. The acquisition of TCL’s shares and the strategic cooperation with TCL in various fields, including joint research and development and supply chains, are highly beneficial to Xiaomi’s further exploration and growth in its home appliance business. In 2019, Xiaomi is determined to introduce amazing home appliances that are honestly priced.”

TCL Corp. said, “Xiaomi’s investment in our shares will strengthen the collaboration between the two companies, and therefore help to build a closer strategic partnership. The two companies have shown a strong complementarity in their business. We believe Xiaomi’s strong product development and superior R&D capabilities, combined with our rich supply chain and production experience, will form a strong industrial synergy effect. Therefore, we can jointly promote the rapid growth of China’s smart home appliance industry and expand into the global market.”

The basis for this partnership is innovation and the desire to launch competitive products at honestly priced.

This investment is a clear proof of the intention of the Xiaomi group to get into the smart home market. I have repeatedly stated that Xiaomi’s profit is not the one on the smartphone market. This is a limited market. Major profit comes from smart services and products connected to smartphones.

In 2018, the home appliance business was a new growth engine for Xiaomi. Xiaomi TV became China’s largest smart TV brand in 2018, and its global sales increased by more than 350% year-on-year, according to its Q2 results – the press release said.

I think this partnership also has a long-term side. A part seen by passionate semiconductor engineers and completely ignored by fans of performance features.

By Tudor
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Website: Tudor