Restoring Lei Jun's territory: ecological integration becomes more intense

The Xiaomi group - and to go further - the Lei Jun group has extended new tentacles.

"New Fortune" magazine recently published a cover article "Lei Jun System", which presented Lei Jun's angel investment, Kingsoft Software, and Xiaomi layout.

Angel Lei Jun

During the period from Kingsoft's IPO in October 2007 to his return to Kingsoft in July 2011, Lei Jun transformed into an angel investor. His style of following the trend is just like the name of Shunwei Capital. Shunwei Capital was established in 2011 with a first-phase fund of US$225 million. The second-phase fund was raised on April 11, 2014 with a scale of US$315 million.

During this period, Lei Jun directed Shunwei Capital to invest in many companies including Vancl , Duowan, Youshi Technology, Lakala , UC, Dajie.com, Great Wall Club and Duokan, etc. These companies basically belong to the three very promising fields that Lei Jun was optimistic about five years ago.

The first is the mobile Internet sector. "The scale of mobile Internet is more than 10 times that of PC Internet." UC Youshi, Duokan Technology, Wali Voice Chat, 7K7K, Taimei, I Speak, YY, Yiqizuoye, Zhigu, Kaka Mobile, Xixun Unlimited, Xunlei and Tianwang all belong to this sector. The second is e-commerce. Lei Jun's investment companies include Joyo.com, Shangpin.com, Vancl.com, Letao, Yeke and Youyou.com. The third is the Internet community, including Xiaoyao.com, Lexun Community, Duowan Game Network (formerly "Huanju Times"), Greenman.com, Tech Web, Great Wall Club, Leifeng.com and Dajie.com.

In addition, Lei Jun has also dabbled in other fields, investing in projects such as Lakala, Keniu, Haodaifu, ZEALER, Kingsoft Duoyi, and recently investing in JiMuBox, entering the P2P market. In October 2014, he also participated in the private placement of Huace Film & TV, a listed company, through Beijing Wali, investing 50 million yuan.

Lei Jun adheres to the two principles of "no investment if you are not familiar with it" and "invest only in people" in investment. He said that he only invests in people, not projects, and only invests in people he knows and people who are familiar with him. "I don't care what project you are working on. I think in China, in today's Chinese startup market, what is lacking is execution, not ideas." For example, Sun Taoran of Lakala, Yu Yongfu of UC Web, and Wang Hang of Good Doctor are all friends of Lei Jun, Chen Nian of Vancl is his old colleague, and Wang Xiujuan of Dajie.com is his schoolmate.

In addition to the already listed Huya, UCWeb is another successful investment case of Lei Jun. Alibaba invested in UC twice in March and December 2013, holding 66% of the shares. On June 11, 2014, after UCWeb was acquired by Alibaba, its valuation reached 5 billion US dollars, far exceeding the 1.9 billion US dollars that Baidu paid to acquire 91 Mobile Assistant that year.

Of course, Lei Jun has also had his share of failures. In 2012, Shunwei Capital invested in Letao, a shoe B2C company, which invested $30 million with Detong Capital in its Series D round of financing. In April 2014, Letao was acquired by Guangdong Guanpeng Shoes and a Hong Kong investment institution for only tens of millions of yuan.

Jinshan Group: Revival and hidden worries

In September 2010, Lei Jun returned to Kingsoft as chairman. Lei Jun was reborn. After leaving Kingsoft in October 2007 and becoming an angel investor, he invested in more than 20 companies in mobile Internet, e-commerce and Internet communities. On July 5, 2011, Qiu Bojun stepped down and Lei Jun officially took over. He began to transform Kingsoft with his understanding of mobile Internet. At the same time, Tencent Holdings (00700.HK) was quickly introduced as the largest shareholder of Kingsoft.

Under Lei Jun's leadership, Kingsoft's complex business units were eventually integrated into a "3+1" structure, with "3" referring to Kingsoft Office (WPS) + Kingsoft Games (Seasun) + Kingsoft Network (KIS, now Cheetah Mobile), and "1" referring to Kingsoft Cloud. In July 2012, Kingsoft WPS Office subsidiary followed Kingsoft Network and Seasun to complete MBO, and Lei Jun happily announced that the "3+1" strategy, that is, the pattern of three major existing business lines plus one strategic new business line, has taken shape. At the same time, the management of the four major subsidiaries was also finalized, with Fu Sheng at the helm of Kingsoft Network, Zhang Hongjiang as the CEO of Kingsoft Software and responsible for Kingsoft Cloud, Zou Tao as the CEO of Seasun, and Ge Ke in charge of WPS.

—— Fu Sheng leads Cheetah Mobile to break through

Fu Sheng, who followed Zhou Hong all the way through 3721 and 360, was once the most outstanding product manager under "Master Zhou". He had a keen sense of smell and decisive execution for Internet products. After breaking up with the "Master", he joined Matrix China and then founded KeNiu Network. In October 2010, Kingsoft Security, which was spun off, exchanged its 18.75% shares for shares and merged with KeNiu Network to form Kingsoft Network.

For Lei Jun, the most important thing about the merger of Kingsoft Security and Keniu Network was that he got Fu Sheng, a powerful general. During the growth of Cheetah, Fu Sheng seized opportunities, resisted external enemies, and achieved great success. He formed an alliance with Tencent through the 3Q war, and then received Tencent's explicit or implicit support; he seized the opportunity of Sogou's merger with Soso and Qihoo's (QIHU.NYSE) struggle to deal with the new Sogou, and gained a time window for development; he formed an alliance with BAT and got help from the giants at a critical moment.

Facts have proved that "subjugating" Fu Sheng was Lei Jun's most wise decision, while letting him leave was the mistake that Zhou Hong, known as "Master Zhou", should not have made. When Kingsoft Network (renamed "Cheetah Mobile" after listing, hereinafter referred to as "Cheetah Mobile") was valued at about 500 million yuan when it merged with KeNiu. As of October 23, 2014, Cheetah Mobile's market value was 2.43 billion US dollars, a 30-fold increase after conversion. On August 11, 2014, Cheetah Mobile's market value reached a peak of 3.918 billion US dollars, which made its highest increase in value reach nearly 50 times.

——Establishing a strategic partnership with BAT

Kingsoft has always had support from giants in its growth process. As early as 2005, Kingsoft Software, which was defeated by Microsoft, survived only after receiving a "blood injection" from Lenovo. After that, it received support from BAT and Xiaomi. According to the prospectus of Cheetah Mobile, 25%, 19% and 14% of its revenue in 2013 came from Alibaba, Baidu and Tencent respectively. This is in stark contrast to Qihoo, which has enemies on all sides. As a strategic partner of BAT, Cheetah provides value-added services to BAT, such as malicious website filtering or security software modules, in exchange for preferential referral traffic, thereby increasing the exposure of its apps.

In 2011, Kingsoft received a total of RMB 7.01 million in marketing revenue from Tencent, and RMB 38.03 million in the first eight months of 2012. On September 27, 2012, the two parties raised the upper limit of marketing expenses to RMB 120 million in 2012 and RMB 200 million in 2013. According to the strategic cooperation agreement reached between Tencent and Cheetah Kingsoft on December 27, 2013, the upper limit of promotion expenses paid by Tencent to Cheetah in 2014 and 2015 was RMB 22 million and RMB 33 million respectively. This upper limit was modified in the supplementary agreement on July 31, 2014: the upper limit of promotion expenses in 2014 and 2015 was revised to RMB 100 million and RMB 105 million respectively.

Tencent successively invested in Kingsoft and Cheetah Mobile. On June 25, 2013, Kingsoft announced that it and Tencent jointly increased their holdings in Cheetah Mobile. Tencent spent US$46.98 million and Kingsoft spent US$5.22 million to acquire Kingsoft Network's B series preferred shares. The newly added shares accounted for 10% of the total share capital after the acquisition, of which Kingsoft accounted for 1% and Tencent accounted for 9%. So far, Tencent holds 1.22% of Cheetah Mobile's common shares, 7.77% of A series preferred shares, and 9% of B series preferred shares, totaling 17.99%. Before Tencent invested in Cheetah Mobile, Kingsoft's shareholding ratio in Cheetah Mobile was 72.22%. After Tencent's investment, Kingsoft's shareholding ratio was reduced to 54.9%. At this time, Cheetah Mobile's valuation exceeded US$500 million.

In April 2014, Baidu, Kingsoft, Xiaomi and Cheetah Mobile jointly signed a share subscription agreement; Kingsoft will subscribe for shares worth up to US$10 million, Baidu will subscribe for shares worth up to US$20 million, and Xiaomi's investment company Xiaomi Ventures will subscribe for shares worth up to US$20 million, becoming the cornerstone investors of the IPO of Cheetah Mobile, an independent spin-off of Kingsoft, further strengthening the existing strategic partnership.

——Behind the “halved” drop in Kingsoft’s stock price

Kingsoft's stock price hit an all-time high of HK$33.5 per share on April 2, 2014, which happened to be the day before Cheetah Mobile's first announcement of a spin-off listing. On October 14, 2014, Kingsoft's stock price dropped to HK$17.74 per share, and then on October 23, it issued a profit warning, and the stock price dropped to HK$16.88 per share. The stock price was cut in half, and the market's doubts about Kingsoft's second round of reforms returned.

First, the mobile strategy is in full swing, and the investment period drags down the net profit margin. From 2011 to 2013, Kingsoft's net profit margin remained above 32%, but by mid-2014, its net profit margin dropped to 26.62%. At the same time, R&D expenses and marketing expenses soared. In particular, the proportion of marketing expenses to total revenue soared, from 12.33% in 2011 to 22.69% in mid-2014. The proportion of R&D expenses has remained stable at nearly 30%. Zheng Ke, vice president of Xishanju, said that in 2014, the investment in mobile game R&D alone will exceed 100 million yuan. In the profit warning issued on October 23, Kingsoft said that due to the substantial increase in R&D costs, marketing expenses, and option expenses, net profit fell sharply. The next day, Kingsoft's stock price fell 11.92%. The capital market always votes with its feet for those who reduce EPS.

Secondly, of course, there is the impact of Cheetah Mobile's spin-off and listing. After Cheetah Mobile's spin-off and listing, Kingsoft Software still has control over Cheetah Mobile, but the shareholding ratio has dropped from 54% to 47%, and it is still a consolidated statement. On the surface, from the perspective of revenue and profit, Kingsoft Software has not been adversely affected by the spin-off. Instead, it has obtained development funds and increased its market value. However, from the perspective of price-earnings ratio, there may be a different interpretation. Kingsoft Software's spin-off and listing of Cheetah Mobile, which has the best upward momentum, is equivalent to spinning off the high PE business and leaving the low PE business, so the parent company's PE will also be lowered. Reflected in the stock price, naturally, Cheetah Mobile's stock price rose, while Kingsoft's stock price fell. It is particularly obvious that on April 2, 2014, the day before the first announcement of Cheetah Mobile's spin-off and listing, Kingsoft Software hit a record high of HK$33.5 per share, and has been falling since then.

In a nutshell, the consolidated financial statements are about Cheetah Mobile's revenue and net profit, not its P/E ratio. Cheetah Mobile's annual growth rate exceeds 100%, while online games and WPS grow steadily at a rate of less than 40%. Therefore, the valuation of Kingsoft Software before and after the split may be the difference between 50 times PE and 20 times PE. Unless a new "Cheetah" emerges from Kingsoft's existing departments, Kingsoft's stock price can regain its growth momentum.

After Cheetah Mobile was spun off and listed, Kingsoft Software still had three major businesses: Seasun, WPS and Kingsoft Cloud. Seasun, which has been proven to be capable of producing good works, has three major promotion channels: Xiaomi, Cheetah and Xunlei. However, the worry that "all 12 mobile games have failed" lingers. WPS relied on government orders and free strategies to occupy the mobile terminal, indirectly shaking Microsoft's monopoly, but the decision-making mistakes on the iOS version led to the missed best development period. Kingsoft Cloud divested Kingsoft QuickPan Personal Edition and focused on the enterprise market. The game cloud that entered in 2014 performed brilliantly, but Kingsoft Cloud is still in the stage of burning money, and the future pattern remains to be seen.

The most crucial controversy is over the person at the helm. If Kingsoft Software's brilliant turnaround is due to Lei Jun's charm, and Cheetah Mobile's breakthrough is driven by Fu Sheng's style, WPS, Seasun and Kingsoft Cloud, which are advancing along the established mobile Internet strategy, seem to lack a leader with a clearer banner.

——Kingsoft Cloud, where to go?

In January 2012, Kingsoft Software spun off Kingsoft QuickDisk business and established Kingsoft Cloud, an independent subsidiary. Kingsoft QuickDisk has been launched for three years since 2010. Official data shows that as of April 2014, Kingsoft QuickDisk personal version users have exceeded 45 million, and the number of daily active users has reached millions. At this time, Kingsoft Cloud consists of two parts: Kingsoft Cloud Storage Platform and Kingsoft QuickDisk.

Within Kingsoft, Kingsoft Cloud was also treated as a startup and raised external funds. On November 30, 2012, Kingsoft Software and Xiaomi Technology reached an equity sale agreement. Kingsoft Cloud, a subsidiary of Kingsoft, will sell 9.87% of its shares to Xiaomi for $1.82 million (91 million shares will be issued and sold to Xiaomi at $0.02 per share, with a 2012 valuation of $18.4397 million). After the transaction was completed, Kingsoft, Xiaomi and Kingsoft Cloud management held 72.56%, 9.87% and 17.57% of Kingsoft Cloud's shares respectively.

On August 13, 2013, Kingsoft Cloud announced the completion of a $20 million Series A financing round, led by Yuri Milner's fund. Milner is a well-known Russian investor who manages DST and another fund. DST focuses on late-stage investments, having invested in Facebook three times and Xiaomi Technology; while the latter focuses more on early-stage investments, having invested in JD.com, and Kingsoft Cloud was also invested in by this fund. However, the shareholding ratio of this fund has not been disclosed, and the equity structure of Kingsoft Cloud will not undergo fundamental changes, and Kingsoft Software still maintains equity control of Kingsoft Cloud.

Currently, Kingsoft Cloud is still in the stage of burning money. In the first three quarters of 2012, Kingsoft Cloud suffered a net loss of about 18 million yuan, and a loss of 61 million yuan in 2013. Wang Yulin, who took over as the president of Kingsoft Cloud in early 2013, analyzed that Kingsoft Cloud Storage Platform is the business with the shortest profit cycle of Kingsoft Cloud, followed by Kingsoft QuickDisk Enterprise Edition, and Kingsoft QuickDisk Personal Edition takes the longest time to make a profit.

The revenue of Kingsoft Quickdisk Personal Edition comes from two parts: paying users and advertising. Kingsoft Quickdisk provides 15GB of free space to the personal version. If you exceed this capacity, you need to buy a space voucher, and the cost of 10GB per year is about 40 yuan. Wang Yulin predicted in early 2013 that when the number of users of Kingsoft Quickdisk Personal Edition reaches 100 million and the proportion of paying users exceeds 1%, it will be profitable. Based on the average consumption of 40 yuan per user, the revenue of Kingsoft Quickdisk Personal Edition will reach about 40 million yuan to offset the investment cost. However, now personal clouds often have 100G of storage space, and Kingsoft Quickdisk Personal Edition obviously has no advantage. In August 2013, Kingsoft Cloud announced that Kingsoft Quickdisk Personal Edition launched the "100G space permanently free" plan. Obviously, the break-even point of 40 million yuan in revenue previously calculated by Wang Yulin could not be reached.

After redefining its position as a platform service provider, Kingsoft Cloud began to divest its most unprofitable 2C business. In September 2014, Kingsoft Kuaipan Personal Edition was sold to Xunlei for US$33 million. At that time, the number of Kuaipan users exceeded 120 million.

On the other hand, the game cloud, which entered the market in early 2014, has performed brilliantly. In the first half of 2014, the scale of China's mobile game market reached 11.78 billion yuan, with 448 million mobile game users. It is estimated that the market scale in 2014 will be around 28 billion to 30 billion yuan; by the first half of 2017, the mobile game market share may reach 100 billion yuan. Wang Yulin pointed out the importance of cloud architecture to games in his speech at the GiTC conference on October 10, 2014. He gave an example that a game with a DAU (daily active users) of 200,000 can have a turnover of tens of millions a month, and usually it will be put back to the furnace if it is still not good after 15 days. However, to achieve this 200,000 DAU, it is necessary to build a server by yourself, invest at least 3 million yuan, and take at least 3 months. After 3 months, the life cycle of the game has expired. At present, there are no more than 5 service providers in China that can truly provide professional underlying cloud architecture for game development teams. Kingsoft Game Cloud has a higher chance of success with the help of "Lei Jun-affiliated" game distributors such as Xiaomi and 7k7k. If the rapidly growing number of Xiaomi users is imported into the cloud service, Kingsoft Cloud can also achieve rapid growth in users, but there is no timetable for profitability yet. In addition to the game cloud, the rapidly growing monthly active users of WPS mobile terminals can also be quickly imported into Kingsoft Cloud.

The frequent interactions between Xiaomi and Kingsoft Cloud have strengthened Xiaomi's control over Kingsoft Cloud, and it is not ruled out that Kingsoft Cloud and Xiaomi Cloud will merge into one in the future. On August 21, 2014, Xiaomi acquired 161.688 million preferred shares of Kingsoft Cloud through Apoletto Limited. After the acquisition, Xiaomi will hold approximately 20.76% of Kingsoft Cloud's equity, and Kingsoft Software will hold 63.83%. Kingsoft Cloud agreed to grant Kingsoft Software and Xiaomi warrants, allowing the two companies to subscribe for no more than 24.948 million shares (total cost of approximately US$2 million) and approximately 162 million shares (total cost of US$12 million) of Kingsoft Cloud preferred shares at an exercise price of US$0.0742 per share, respectively. The validity period of the warrants is 18 months from August 21, 2014.

In the future, Xiaomi is expected to hold a maximum of 30.06% of Kingsoft Cloud Group's shares, while Kingsoft's shareholding in Kingsoft Cloud will drop to 56.34%. If both parties exercise their stock options, the shareholding ratios in Kingsoft Cloud will become: Kingsoft holds 57.18% and Xiaomi holds 29.48%. If only Kingsoft exercises its stock options, Kingsoft's shareholding will rise to 64.61%, while Xiaomi's shareholding will drop to 20.31%.

——Will Kingsoft Software become Lei Jun’s abandoned child?

The answer is naturally no. As one of Lei Jun's "Four Horsemen", Kingsoft Software's position is unshakable.

First, Kingsoft Software is the place Lei Jun is most passionate about. From 1992 to 2007, Lei Jun worked hard at Kingsoft, but he chose to "retire" for three years because he could not really realize his ambitions. In April 2010, with his deep understanding of mobile Internet, he founded the most important portal of mobile Internet - smartphone, namely Xiaomi. Later, under the persuasion of Qiu Bojun and Zhang Xuanlong, he returned to Kingsoft to transform Kingsoft Software with the genes of mobile Internet.

Second, from the perspective of mutual penetration of equity and business, Xiaomi and Kingsoft Software have become more closely connected. Xiaomi has already invested in Kingsoft Software's subsidiaries Kingsoft Cloud, Kingsoft Office and Cheetah Mobile. In the future, the integration of Xiaomi and Kingsoft's major business departments will be further deepened. The sale of Kingsoft Personal Cloud to Xunlei, in which Xiaomi also holds a stake, is also a win-win situation. There are "deep business considerations", said "Master Zhou".

Third, Cheetah Mobile's Clean Master, Battery Doctor and WPS, which is still in Kingsoft Software, all have entry value. There seems to be no reason to discard the mobile terminal that has accumulated a large number of users.

A comprehensive inventory of Lei Jun's wealth

Kingsoft Software, Joyy, Cheetah Mobile and Xunlei are known as Lei Jun's "Four Horsemen". Based on the stock price and exchange rate on October 27, 2014, the total wealth controlled by Lei Jun through the "Four Horsemen" is worth US$1.545 billion.

Joyy, which received a $1 million angel investment from Lei Jun, was discovered by various institutions during multiple rounds of financing. This free voice software is used by online anchors, and 90% of its income comes from music anchors, game anchors and various membership fees. In October 2014, its market value exceeded $4 billion. At the beginning of its listing, Lei Jun held 215.24 million shares of Joyy, accounting for 23.8%. According to the announcement on February 14, 2014, Lei Jun held 214.89 million shares, and his shareholding ratio dropped to 19.4%. Lei Jun made a lot of money from this investment, adding nearly $1 billion to his wealth.

Xunlei's prospectus shows that Xiaomi holds 27.2% of Xunlei's shares through its investment company Xiaomi Ventures Limited, making it the largest shareholder. Kingsoft Software holds 12.2% of the shares, and Xunlei CEO Zou Shenglong and President Chen Hao hold 12.6% and 5% respectively. Lei Jun holds a total of 39.4% of Xunlei's shares through Xiaomi and Kingsoft Software, and his control over Xunlei exceeds that of all Xunlei's directors and executives, who hold 34.5% of Xunlei's shares. This means that Lei Jun's personal shareholding in Xunlei is at least 9.96% (=27.2%×30%+12.2%×14.79%). Xiaomi co-founders Hong Feng and Wang Chuan have joined the Xunlei board of directors, and together with Kingsoft Software CEO Zhang Hongjiang, the "Lei Jun faction" has 3 seats on the Xunlei board of directors.

Before Cheetah Mobile went public, Lei Jun held 4.7% of its Class A common stock and 54.1% of its Class B common stock through Kingsoft, with a total of 53.5% of voting rights. After Cheetah Mobile went public, his shareholding was reduced to 47%. This is equivalent to Lei Jun's personal holding of 6.95% of Cheetah Mobile's equity (=0.47*0.1479). During Cheetah Mobile's listing, Xiaomi, Baidu and Kingsoft invested US$50 million as cornerstone investors, but their equity ratio was still small and was not included in Lei Jun's shareholding.

In addition, Lei Jun personally and through his wholly-owned subsidiary holds 14.79% of Kingsoft's shares.

Xiaomi lays golden eggs

Lei Jun's most famous brand is Xiaomi. According to the documents disclosed by Kingsoft to the Hong Kong Stock Exchange in May 2012, it holds more than 30% of Xiaomi's issued shares.

Under Lei Jun's personal guidance, Xiaomi's valuation has skyrocketed. At the end of 2010, the valuation was $250 million, at the end of 2011, it was $1 billion, at the end of June 2012, it was $4 billion, and in August 2013, it was $10 billion (see table). Today, Xiaomi's valuation is over $30 billion. In March 2014, it was rumored that Tencent invested $2 billion in Xiaomi, and Xiaomi's valuation soared to $30.9 billion. However, Lei Jun later denied Tencent's investment in Xiaomi. According to iSuppli Corp. China Research Director Wang Yang's Weibo, Xiaomi has just raised a round of funds recently, with a valuation of up to $40 billion.

Integration and extension of Lei Jun’s system

"Focus, excellence, reputation and speed".

These seven words are the essence of Lei Jun's experience in the Internet for nearly 10 years. Xiaomi, founded on April 6, 2010, is Lei Jun's masterpiece armed with this set of thinking. From the initial mobile phone system to mobile phones and tablets, from TVs to boxes to routers and smart accessories, Lei Jun packaged the Xiaomi model as "Apple + Facebook", trying to open up the entire industry chain of "software + hardware + services".

The transformation of Kingsoft Software is another classic example of Lei Jun practicing the seven-word motto. In July 2011, Lei Jun officially returned to Kingsoft Software and immediately launched the reform. Under the continuous catalysis of the "Lei Jun premium", the reform ended perfectly with Kingsoft Software's stock price soaring 10 times and Cheetah Mobile's spin-off and listing.

As Lei Jun puts more energy on Xiaomi, the core of his ecosystem, Kingsoft's "Lei Jun premium" is constantly weakening. However, from a global perspective, the expectation of integration of the "Lei Jun system" is becoming stronger. With Xiaomi at the top, Kingsoft Software, Joyy, Xunlei, and Cheetah Mobile as the backbone, and more than 20 invested companies as the community of the "Lei Jun system", both equity and business have begun to penetrate each other. Xiaomi has invested in Cheetah Mobile, Seasun, and Kingsoft Cloud, Kingsoft Cloud's Kuaipan Personal Edition has been divested to Xunlei, and Lei Jun's investments in Duokan and Walli have been integrated into Xiaomi. In the future, the integration of Kingsoft Cloud and Xiaomi Cloud, and the further integration of Xiaomi and Kingsoft Software, everything is possible.

Liu Chuanzhi, who built Lenovo, once commented on the Xiaomi model: "Xiaomi is almost a model that cannot be replicated. It must be done in the way that Lei Jun did. Xiaomi's operating costs are very low. The reason why they are so low is that they directly control several levels instead of using a multi-level management method, which reduces operating costs."

However, as Xiaomi's battle line becomes longer and longer, people can't help but worry that competitors will always find the weak points of the Xiaomi empire and then destroy it in one fell swoop.

First, Xiaomi mobile phones are under attack from competitors such as Huawei and Meizu. Xiaomi was the first to quickly capture the user base with low prices and high quality, and then Huawei and Meizu joined the competition, especially Huawei, which is catching up. This is undoubtedly a huge challenge for the Xiaomi empire with mobile phones as its core.

Secondly, Xiaomi's content-side architecture needs to be further strengthened. In February 2014, Xiaomi Technology acquired a wholly-owned stake in Walle Network and integrated multiple businesses such as Mi Chat, games, and videos to form "Xiaomi Interactive Entertainment", with Shang Jin, the former CEO of Kirin Games, as the general manager of Xiaomi Interactive Entertainment. The personnel structure of Xiaomi Interactive Entertainment also includes Walle Network, Mi Chat team and some former Kirin Games employees. "Leibs" has obviously begun to consolidate the weak links of the Xiaomi empire.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.