Abstract: Explain the reasons of buying HK stock Xiaomi Corp and share my views.
What I want to share with you today is the transaction I made on August 20. The details are as follows:
Reasons to buy 1810
Today, Xiaomi followed the decline of other Chinese stocks and has reached a low level in nearly three months. Since the last time my short put contract was executed at the end of July with exercised price at HK$26, the stock price of Xiaomi has dropped by 10% again. For the last purchase record, please see here. Therefore, the decision to increase holdings again this time is mainly because of the confidence in Xiaomi’s long-term investment value.
At present, Xiaomi’s TTE PE has dropped to 19 times. Compared with the company’s annual growth rate, I believe it is definitely underestimated now. In fact, I use multiple Xiaomi brand home appliances myself which I am very satisfied. I believe the value and popularity of the Xiaomi brand products have been improved a lot compared to the time it was first launched. In addition, the Xiaomi brand products are well-known for its good reputation and cost-effectiveness. In recent years, its mobile phone business sector has also begun to be focused on high-end products which can certainly push up the gross profit margin. On the other hand, I think the boss Lei Jun is a very trustworthy person who will never deliberately treat shareholders wrongly, and also has a great sense in technological innovation. Therefore, if you increase the shareholdings of Xiaomi stock at such a low level now, I believe it will be a good investment decision in the long run. Of course, since the current Chinese stocks are generally in a falling trend, if you buy at this time, you should not expect the trend will be reversed very soon, but if your investment period can be extended, I don’t think there will be a big problem.
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