Motivation And Performance Of Xiaomi Group's Adoption Of Dual-class Share Structure

In April 2018,the Hong Kong Stock Exchange officially released the revised Main Board Listing Rules,opening up a dual equity policy,allowing companies to use Dual-class Share Structure to list in Hong Kong.On July 9 of the same year,Xiaomi Group became the first enterprise to list in Hong Kong with a Dual-class Share Structure.The Dual-class Share Structure,a special shareholding mechanism of "same shares with different rights",guarantees that the company's founder team will not be affected by financing after the company is listed,and enjoys higher voting rights in order to issue AB stocks with different voting rights Control the company to prevent interference and threats by foreign funds or other shareholders to the company's management control.Under this background,this paper selects Xiaomi Group as the research object to study Xiaomi Group's unique development strategy model,the motivation of Xiaomi Group's adoption of Dual-class Share Structure,and the impact of adopting Dual-class Share Structure on Xiaomi's performance.First,it analyzes the concept of Dual-class Share Structure and how the Dual-class Share Structure affects company performance from a theoretical perspective.Secondly,using a case study method,by analyzing the strategy,founder role,financing situation,and change history of equity ratio in the development process of Xiaomi Group,the reasons for Xiaomi Group to adopt a Dual-class Share Structure were found and Xiaomi Group adopted a Dual-class Share Structure The motivations are summarized as follows:(1)The development of the unique strategic model of Xiaomi Group requires the founder to have control.(2)The founder of Xiaomi Group has high-value human capital,and the control right in the hands of the founder can make efficient use of decision-making power within the enterprise.(3)The market recognizes the team of founders,and control in the hands of the founders is conducive to the integration of market resources in three areas.In the case study,the Xiaomi Group's financial performance indicators and non-financial performance indicators are used to analyze the impact of the dual equity structure on Xiaomi Group's performance.The financial performance is mainly carried out from the ROE analysis and the Tobin Q analysis Analysis,combined with DuPont analysis system to disassemble and analyze the ROE of Xiaomi Group,Finally,compare with the financial performance of companies in the same industry that do not adopt a dual shareholding structure.The analysis of non-financial performance includes three aspects: the implementation of the R & D strategy,the implementation of the ecological strategy,and the internationalization process of the Xiaomi Group.It is concluded that the Dual-class Share Structure has a positive impact on the financial performance of Xiaomi Group and has helped to implement the strategy of Xiaomi Group.