Reinventing the Millennium

Yike's much-anticipated financial report finally came out, and once it was released, it once again supported the stock price, which did not surprise analysts.

For the entire fiscal year 2014, Yike's net revenue was US$133.8 billion, an increase of 40.2% compared with 2013, operating profit was US$40.14 billion, an increase of 35.5%, and net profit was US$29.94 billion, an increase of 38.7%, all of which were record highs.

Among them, Yike's mobile phone products contributed 69.9% of revenue, tablet products contributed 15.3%, notebooks contributed 8.7%, and mobile ecology and technical service revenue contributed 6.1%.

According to geographical distribution, the Americas market accounted for 32% of revenue, Europe for 27.2%, China for 31%, Japan for 6.3%, and the remaining regions for 3.5%.

Compared with last year, Europe retreated from the first market to the third, China increased from the third to the second, and the Americas increased from the second to the first.

According to the description in Yike's financial report, this situation is partly due to "the weakness of the euro offsetting the positive factors of the market increase".

The same factor is the Japanese market, "The net revenue and unit sales of the Japanese market have increased year-on-year, and the net revenue of software and technical services has also increased. The Mars 8.8 series products launched last year are widely loved by Japanese consumers, but these positive factors are partially offset by the weakness of the yen against the US dollar."

Even so, the difference between the three major markets is not large, but the American market is indeed Yike's world's number one market, and this status has been given extra attention this year.

Many data in Yike's financial report have been deeply interpreted. In addition to various types of revenue, growth, proportion, etc., there is also one item that has been widely reported. Yike's R\u0026D expenditure in 2014 has risen sharply to US$9.03 billion, far exceeding the US$6.8 billion in the previous fiscal year.

The major media's endless interpretation comes from Yike's financial report.

However, just the next day, Yike released the 2015 Q1 quarterly report again, breaking the previously released Q4 quarterly report record again after the new high in the financial report.

Yike's previous Q4 quarterly report has been praised wildly by many media, and this Q1 still grew compared with Q4.

Yike's net revenue in Q1 this year was US$52.432 billion, a 13% increase from the previous quarter and a 54.6% increase from the previous year. Its operating profit was US$18.419 billion, a 22.05% increase from the previous quarter and a 69.46% increase from the previous year. Its net profit was US$13.63 billion, a 21% increase from the previous quarter and a 71.2% increase from the previous year.

The cold figures from the Q1 quarterly report almost instantly ignited the media and investors, triggering another rise in stock prices.

Yike used the word "growth", and most media used the more accurate description of "surge" after quoting it.

Needless to say, compared with last year's Q1, the main sales force in this year's Q1 is the Mars 8.8 series that won the global crown. It is undoubtedly more competitive than last year's products, but this year-on-year growth is quite breathtaking.

Yike's Q4 includes traditional big promotions in the US and Europe, such as Thanksgiving, Black Friday, and Christmas. It is easy to see growth in various aspects. Therefore, it is usually the most interesting quarterly financial report, while Q1 is often the dullest quarter of the year.

But this rule is invalid in Yike's two consecutive quarters.

Yike sold 8128fy, 13.68 million Galaxy tablets, and 7.284 million Y-Book notebooks in Q4 last year. Selfy, Galaxy, and Y-Book all declined in Q1, but the Mars 8.8 series increased to 74.32 million units.

The figures of the annual report and the quarterly report are compared together. In 2014, the proportion of mobile phones in revenue was 69.9%, but in Q1 of 2015, due to the amazing performance of the Mars 8.8 series, the proportion of mobile phone revenue increased to 77.8%.

It can be said that, except for the performance of the Mars 8.8 series, the sales of other consumer electronic products are in line with the natural curve of decline. Perhaps the decline is also excellent, but Mars is rising against the trend, and the ultimate reason for this performance is that... competitors cannot come up with matching products.

Taiwan News announced the mass production of 16nm on the 20th of last month, but this process has not yet been added to Apple and Samsung. Samsung's own manufacturing process is still silent, and it is expected to be put into production in the second half of the year at the earliest.

Therefore, in the first three months of 2015, Yike's mobile phone is still the world's unique and most powerful product.

Yike's stock price has been shaken by various factors, with negative and positive factors intertwined, but these have not affected the global shipments of its products at all.

At the same time, there is another detail that has been noticed by the media. Yike's Q1 first disclosed the revenue of Yike Cloud business, announcing that it has reached 1.73 billion US dollars.

In Q4 last year, Yike used to include cloud business in the "other income" of $4.15 billion, while Wall Street analysts generally believed that the upper limit of this business was $1 billion.

This time, Yike Cloud's $1.73 billion was surprising. Even according to previous assessments, the growth rate in Q1 was at least 73%, and the development speed was amazing. Its business areas are Europe and Asia, not the United States.

The Wall Street Journal conducted an in-depth report based on Yike's annual and quarterly reports.

"In the past two days, Yike gave a dazzling answer."

"A week ago, Samsung announced its financial report, and mobile phone sales hit many new lows. Apple's mobile phone sales in its previous financial report also showed a significant decline. At that time, everyone had already guessed the answer. The smartphone market could only be cannibalized by Yike."

"However, Yike's results still exceeded everyone's expectations."

"Many of its financial data have reached record highs, such as diluted earnings per share of US$3.64, a month-on-month increase of 20.5%, significantly better than historical performance and exceeding the expectations of Wall Street analysts."

"We have interviewed senior executives of many investment institutions, and they all praised Yike's incredible growth. For example, Nick, president of New England Investment and Retirement Group, believes that 'consumers are always willing to pay for high-quality products, and Mars is the It is recognized as a high-quality product, and there is almost no other choice."

"Spurred by the performance of Yike mobile phones, Apple and Samsung have already seen price dives at the beginning of this year. After all, at the same price, consumers always prefer products with significantly better performance."

"Yike's products can often stimulate users' desire to change their phones. According to surveys by many well-known data institutions, 63% of users in the Apple camp have a desire to change their phones, and 91% of users in the Samsung camp..."

"We have to say that Yike is destroying the Samsung camp."

"Such a strong performance has once again boosted the rise of Yike's stock price, and no doubt caused some institutions that quietly tested the short-selling market to stop their losses immediately."

"However, Yike's stock price has fluctuated repeatedly in the past two months, and it still needs to resolve thorny external issues as soon as possible."

"As Yike itself described in the financial report, 'The company believes that revenue during the year will face downward pressure due to a variety of factors, including slowing growth in the global smartphone market, intensified competition, shortened product life cycles, and external factors in manufacturing services. Potential cost increases and so on'.

"It is said that Yike is negotiating with GlobalFoundries to take a stake. This is undoubtedly a good opportunity to solve the 'potential increase in external costs'. However, because Yike has previously broken down negotiations with Intel, it is still unclear whether its cooperation with GlobalFoundries can be achieved."

“Once Yike’s negotiations with GlobalFoundries break down again, its list of potential collaborators will not have many options.”

"Yike is aware of the problem and is solving it."

"The market remains optimistic about the future of Yike. Many rating agencies have adjusted Yike's stocks that were classified as 'hold' or 'reduce' due to the shock to 'buy' again. There are also several companies related to Yike. Trading company shares benefited."

"No one will give up on an important market like the United States, and no market will reject a brand like Yike."

“I hope Yike will continue to bring better quality products to consumers.”

The "Wall Street Journal" report on Yike was quite meaningful at the end, and unlike its euphemism, this time with the release of Yike's financial report, many executives made appeals.

But the target of their appeal is Yike's board of directors.

"The board of directors of Yike must adopt a more transparent approach to deal with problems. It cannot allow the fluctuation of stock prices and the losses caused to investors by the volatile situation."

"The board of directors of Yike must use a more correct way to actively deal with the problem."

As for why Fang Zhuo was not named...

Perhaps this has something to do with the sudden rise of public opinion.

Just when Yike released its financial report and the stock price rose again, many media in the conservative camp launched doubts about Fang Zhuo and Yike. One of the important ones was the dispute between Yike and investment institutions many years ago.

The industry calls this dispute the "Yike Short Squeeze Case". It once forced the SEC to issue new regulations, which is quite famous.

The short squeeze case at that time made countless institutions change their colors. After the short sellers were defeated, some institutions and investors launched a lawsuit against Fang Zhuo, believing that he "manipulated the market" and "secretly opened positions" and was suspected of violating securities laws. 10b-5 anti-fraud provisions of the law.

Later, large institutions such as Goldman Sachs and Bridgewater Associates that participated in the prosecution gradually withdrew the lawsuit, but there were still small institutions that were unwilling to give in.

The ones who came forward this time were small institutions and investors who had lost the case. They united and hoped to reexamine Fang Zhuo's past violations, including the alleged insider trading of MIGA funds.

"National Review" has been one of the iconic publications of the conservative movement since its establishment in 1955. It is the public opinion position of conservatives. The topics have always covered politics, economics, domestic and foreign policies and many other contents.

Its latest issue of the magazine published photos of Yike and Fang Zhuo on the cover for the first time. Half of them were the faint words of the financial report, and the other half were against the background of a dark white house, with Fang Zhuo's obscure back in the center.

"Eko became a behemoth without discipline."

"But perhaps we should explore whether there are more disturbing secrets behind it."

"According to investigations in recent years, as Yike Company develops in the U.S. market, its influence is also expanding, both economically and politically."

“Recently, there have been accusers from investment institutions, such as Abate. He claimed that he was a victim of illegal operations by Yike and MIGA funds. He went bankrupt in a shocking financial showdown, and in that famous short squeeze case, he was responsible for MIGA played an important role and we found that it was involved in the disposal of non-performing assets after the financial crisis at the end of 2009.”

"According to further investigation and analysis, institutions headed by MIGA have many prominent clients, and these clients have some kind of connection with Fang Zhuo."

"We need to question, behind the rapid development of Yike and behind Yike's patent lawsuits, where does the magic source of its smooth sailing come from?"

An in-depth report from the National Review vaguely outlines Fang Zhuo's activities in Meilijian, and vaguely points the finger at certain people in power.

This report explains Yike's development in recent years, especially the success of the Mars 8.8 series last year, but the more prominent these achievements are, the more weight the doubts it describes.

The report even named the "New York Economic and Social Development Institute" where Summers served as chief consultant, criticizing him for accepting sponsorship from Yike and Fang Zhuo, who was both a former financial butler and former director of Oko's Economic Conference NEC.

One stone stirs up a thousand waves!

The New York Economic Review responded: "We are a non-profit social research organization that accepts free sponsorship from many companies. Among them, there is indeed funding from Yike, but it is only a small part."

But such a response is not satisfactory, but has become the focus of continued harassment.

In addition, the compliance of the MIGA fund has also been questioned, and the transparency of Yike's business activities and its actions in the semiconductor industry have once again been given a threatening meaning.

On the one hand, Yike has achieved great success, and on the other hand, there is a boiling backlash against it and its founder!

Fang Zhuo naturally knew these situations and the driving force behind such situations, but he was still a little dissatisfied when he received a call from the lobbying leader Zhao Zhishan.

"Why did you bring up Summers?"

Zhao Zhishan was a little helpless: "Mr. Fang, this was discovered by the media themselves. The establishment of the New York Economic Review is not a secret."

When contradictions are triggered, things do not develop as expected. At least, it is unexpected that the National Review digs and reports with such an extremely serious attitude.

She found that the current contradiction is not just Yike, but also an opportunity for the two factions to show multiple contradictions.

"Mr. Fang, the SEC has confirmed that it will start a new round of investigations, and it is said that it will join forces with other institutions." Zhao Zhishan talked about the latest news.

"Well, if there are doubts, there must be investigations. I already know that. Investigate as soon as possible, draw conclusions as soon as possible, and calm down as soon as possible." Fang Zhuo's information channels are more direct than Zhao Zhishan's.

Zhao Zhishan was only a little surprised when he heard this.

But she didn't expect that the "soon" Mr. Fang mentioned was so early. The SEC conducted an investigation at an astonishing speed, and it took only four days to give the conclusion of the investigation.

In just four days, the SEC joint investigation team announced the end of the investigation, and concluded that no violations were found in Yike, MIGA Fund and Fang Zhuo.

Is such a short time enough to sort out the files?

Zhao Zhishan saw the backlash of public opinion, but soon, the backlash disappeared. The public opinion still only questioned Yike and semiconductors, not the relationship between politics and business.

No matter how short the time is, no matter whether the doubts are supported by facts, anyway, the result is like this.

The enthusiasm for Yike will not be extinguished by an investigation. Similarly, the clamor for the threat of Yike will not be extinguished, but the discussion can only be limited to Yike.

NYSE is innocent and cannot be shamelessly criticized for accepting sponsorship.

Mr. Fang is innocent and cannot be discredited because of the contradictions in the development of Yike.

Summers is innocent, MIGA Fund is innocent, everyone is innocent, there is no violation, just different positions.