MSXIAMI@EP2701A

Last week, South Korea's SK Hynix just listed in the US, and I specifically wrote about it — a leading HBM company with industry-leading profit margins, yet its valuation is even cheaper than its competitors.

@晓风 morning_wind has experience and results, which is worth learning from. He mentioned the top exit based on experience and judgment of Xiaomi's stock. Many investors in Xiaomi, including myself, didn't exit and have held on until now. We can complete this story to provide a reference for everyone.

1. The continuous decline over the past six months has left a scene of devastation.

From last October to June this year, we've been taking hits continuously. The stock price has been halved from its peak of 60. This trend and the magnitude of the decline have far exceeded expectations.

Not exiting can be divided into two schools of thought. One is the speculative school that follows trends in stocks. Actually, shorting could have made money, but retail investors are afraid to short with large amounts consistently. More people chose to gradually build positions at low levels, betting on a rebound. However, under this trend, long positions with leverage have all, without exception, suffered minor losses at best and been completely wiped out at worst.

The other is the value investing school that treats stocks as buying companies. From my observation, they have also suffered significant losses. Whether adding positions at 50 or 30, there has been basically no rebound trend along the way. This means it's hard for those who bought Xiaomi from the second half of last year to early June not to incur losses. But unlike the risks borne by speculators, not using leverage means it's only a paper loss, and there is a chance to break even or even make a profit.

2. A solid fundamental outlook is the greatest support in a downtrend.

Fundamentals are very important. Actually, there have been quite a few stocks with significant declines in the past six months, but the reasons vary. For example, one company faces higher licensing fees, and some aspects of its operations and marketing are difficult to manifest and bring greater competitiveness. Another company's profit model is not focused on good models but is engaged in overselling from the start. It's best for ordinary people to avoid stocks with poor fundamentals. Betting on a rebound for these few bronze medals is too risky.

Xiaomi's stock price has dropped significantly this year. Now everyone knows the main reasons are pressure on the mobile phone sector due to the memory cycle and the car business facing domestic competition coupled with weak consumption. However, the difference between Xiaomi and the aforementioned companies is that it is indeed continuously achieving recognized, quantifiable results. For example, the upcoming Peng Cheng may not be the iPhone moment for cars, but at least it has created Xiaomi's characteristics and differentiation. Moreover, the story from performance cars to family cars is very smooth and complete. This year, AI efforts have also progressed rapidly, with Mimo accelerating on-device AI approval, and robots are more practically honed in factory work. Adversity is a touchstone, giving us more opportunities to understand whether this company loses its footing or steadily makes breakthroughs under pressure. As the saying goes, fortune and misfortune are intertwined. AI has brought the negative impact of the memory cycle, but precisely because of this, the human-vehicle-home ecosystem strategy has been accelerated.

News sentiment is also very important. Xiaomi has high visibility. While it's easy to get information, it also brings a lot of noise, volatility, emotions, and venting, with much secondary interpretation. Currently, the main focus is on first-hand information from the company and avoiding mindless bullish or bearish views by following some KOLs who have their own insights. Sometimes, there is too much and too varied information, so it's necessary to maintain an appropriate sense of distance.

3. Considerations for recent position additions.

It's mainly based on the premise of a positive fundamental trend, with the current price having medium to long-term potential. Not every stock price has the same probability of rising or falling. The safety margin and upside potential at low prices are clearly much better than at high prices. Compared to gambling at high levels, lying flat and waiting for a rise at low levels is too simple. The difficulty might still lie in when to adjust the portfolio later.

$XIAOMI-W(01810.HK)

Last week, South Korea's SK Hynix just listed in the US, and I specifically wrote about it — a leading HBM company with industry-leading profit margins, yet its valuation is even cheaper than its competitors.

编者按@晓风 morning_wind 是长桥资产及收益率均长期排在 TOP1% 的头部作者，但在长桥社区里，他的简介只有一句很低调的话：「据说现在是牛市，牛市最重要的就是保住战果」这句话不是鸡汤。往前倒十年，2015 年那轮著名的大牛市，他从头做到尾，年底一算账——不但没赚，其实还亏了。从那以后，「保住战果」四个字，才一笔一笔写进了他的仓位纪律里。 晓风长期在科技行业工作...

Last week, South Korea's SK Hynix just listed in the US, and I specifically wrote about it — a leading HBM company with industry-leading profit margins, yet its valuation is even cheaper than its competitors.

Last week, South Korea's SK Hynix just listed in the US, and I specifically wrote about it — a leading HBM company with industry-leading profit margins, yet its valuation is even cheaper than its competitors.