XIAOMI's share price soared 8% on January 17, offering HK $13.24, with a market capitalization of nearly HK $320 billion. Since it was included in the Hong Kong Stock Connect, domestic investors have gone on a buying spree, and XIAOMI's share price has soared 60 per cent. XIAOMI has plummeted from a peak of HK $22 to HK $8, which has been questioned by the market and its share price has halved. So how on earth did XIAOMI realize Phoenix Nirvana recently?

In the author's opinion, there are mainly five factors: the year of XIAOMI's 5G, the inclusion of domestic capital decision-making power of Hong Kong Stock Exchange, the strong stimulus that is expected to dye blue and the return of Chinese stocks. As Tan Minglei, executive editor-in-chief of Zhitong Finance, said, going back to XIAOMI's IPO price of HK $17 during the IPO period, I am afraid the near-term goal is not difficult.

How much did XIAOMI benefit from his 5G year?

The mainland of China has begun the commercial era of 5G, and since the commercial use of 5G for two months, China Telecom Corporation alone has more than 8 million 5G users. Due to China's leading commercial use in the world, it is believed that XIAOMI's 5G mobile phone will also seize part of the Chinese mainland market in 2020.

Research firm Counterpoint predicts that 5G mobile phone products in the Chinese market are expected to exceed 100 models in 2020 and cover the middle and low-end price bands below 2000 yuan in the third to fourth quarters. Shipments of 5G mobile phones in the Chinese market are expected to exceed 150 million units in 2020.

In other words, in terms of annual growth, mobile phone shipments this year may be 10 times that of 2019. Mobile phone manufacturers, large and small, will benefit from it. XIAOMI has taken the lead in establishing the trend of 5G mobile phone popularity. Redmi K30 5G was officially launched on December 10, 2019, successfully launching the first 5G mobile phone on the market with a price of less than 2000 yuan.

Qin Yue, assistant vice president of Sino-Thai International Research Department, said that in 2019, the performance of the Hong Kong stock TMT sector was bright, with a number of stocks outperforming the Hang Seng Index by more than 50%, mostly due to performance improvement accompanied by higher valuations. We believe that with the increased certainty of performance improvement and sustainable valuation improvements in major sectors, the market will maintain a performance-oriented style in 2020 and prefer to give higher valuations to companies with greater certainty of performance growth. Considering that after the commercial use of 5G in China, XIAOMI quickly pushed the 5G mobile phone to less than 2000 yuan, there is still room for price reduction in the 5G package, and mobile phone manufacturers are more positive in launching products, we think that the replacement trend of 5G is expected to be ahead of schedule. It is recommended to pay attention to XIAOMI Group-W, which is actively preparing for 5G.

The inclusion of Hong Kong Stock Connect ushered in the decision-making power of domestic capital.

For a long time in 2018 or even 2019, only Hong Kong capital could buy XIAOMI, but domestic capital had no chance to buy it. The unfamiliarity of Hong Kong investors with 5G and XIAOMI mobile phones, the characterization of his company's hardware company, the overvaluation of XIAOMI and the decline in XIAOMI's sales in the mainland market in 2019 led to a continuous decline in XIAOMI's share price, which eventually halved.

On October 30, 2019, XIAOMI and other enterprises with different rights were included in the Hong Kong Stock Connect, and domestic investors could buy XIAOMI, so that people who knew more about XIAOMI could lay out XIAOMI. At that time, XIAOMI's share price was less than HK $10, which was an all-time low of XIAOMI's share price. This is a rare Hong Kong stock Tongmingxing stock at an all-time low, waiting for domestic capital to buy.

Facts have proved that domestic capital did not disappoint XIAOMI. Hong Kong Stock Exchange data show that domestic investors have gone on a buying spree for XIAOMI. Since October 30, 2019, domestic investors have bought 933 million shares of XIAOMI, with a market value of 12.35 billion yuan. The latest domestic ownership is as high as 5.36%. Last week alone, domestic investors frantically bought 130 million XIAOMI shares. The latest statistics show that the domestic purchase of XIAOMI floating surplus has been as high as 29.6%, equivalent to the domestic purchase of only XIAOMI has made an explosive profit of 2.8 billion yuan.

It is expected to dye blue, and is expected to attract active and passive capital coverage.

Hang Seng Index companies will enter the Hang Seng Index consultation market this quarter on the same shares with different rights (WVR, referred to as W shares) and secondary listed companies. Kwan Yongsheng, the company's chief executive, told the local media that he plans to collect market opinions on the blue dyeing of W shares and secondary listed companies in the next one or two weeks, and the results are expected in May.

Mr Kwan said that he understood that investors had risk considerations, but were more concerned about the overall acceptability and acceptability of the market. After the completion of the consultation in the first quarter, the study and decision could be completed in May.

Investors hope that shares such as BABA, Meituan and XIAOMI are expected to be included in the Hang Seng Index as soon as May. If this happens, it is expected to attract more active and passive funds to follow up on the relevant shares, which will have a positive impact on its share price.

The strong stimulation of the return of China-listed stocks to Scientific and technological Internet stocks

Tan Zhile, deputy manager of Yaocai Securities Research Department, said that New economy stocks will be sought after by funds in the short term, mainly because the market's view of the economic outlook turns positive, so it is easier to raise the valuation of New economy stocks.

Qin Yue, assistant vice president of Sino-Thai International Research Department, said that recently, there were reports that the Hong Kong Stock Exchange had discussed a secondary listing in Hong Kong with Trip.com and NetEase, Inc. In addition, Hang Seng Index said that it would consult the market on the inclusion of companies with different rights of the same shares in the Hang Seng Index, driving the market to raise the valuation of science and technology stocks.

Wen Jie, a wealth management strategist at Everbright Sun Hung Kai, said that he is optimistic about Ke stocks mainly because of the high earnings growth potential and the willingness of investors to give them higher valuations. Another angle is that it is less affected by Sino-US trade or political problems in Hong Kong and attracts capital inflows. Finally, some of the above stocks are expected to be included in the Hang Seng Index (as soon as May), which is expected to benefit from Beishui.

Yan Zhaojun, a Sino-Thai international strategist, told Sina Finance that he was optimistic about the market of science and technology stocks this year. The main positive factor this year is the return of blue + US-listed stocks + valuation attraction. This year is the year of the return of Chinese stocks. In the future, the industry structure of Hong Kong stocks will change from a traditional economy to a new economy, which will help to enhance the overall valuation. Tencent, BABA, XIAOMI valuations are cheap, Tencent mobile games began to recover, advertising business with the economic downward pressure is expected to bottom out and stabilize. Meituan, XIAOMI and BABA are expected to be seven blue this year, which is another driving force for stock price growth.

The millet company played in turn, XIAOMI ushered in the moment of valuation improvement.

Finally, the highlight performance of XIAOMI also further stimulated XIAOMI to go higher. Stone Technology, a manufacturer of XIAOMI floor-sweeping robots invested by Lei Jun, chairman of XIAOMI Group, has been approved to register Science and Technology Innovation Board in the mainland. It will become the first XIAOMI ecological chain enterprise to be listed in Science and Technology Innovation Board in Shanghai, and it will also be the third listed company under XIAOMI's ecological chain after Huami and Yunmi listed in the United States.

At present, Lei Jun holds shares in at least 11 Science and Technology Innovation Board companies. Stone Technology, Fang Bang shares, Lexin Technology, Jingchen shares, Jinshan Office, No. 9 Intelligence, Stone Technology, Chuangxin Laser, Juchen shares all have XIAOMI or Lei Jun.

The highlight performance of the major listed companies also makes XIAOMI's investment value more and more prominent. Jinshan office market capitalization is to 80 billion yuan, valuation 276 times, the stock price soared three times.