Set
to Tap Future Opportunities with Solid Position in Premium Markets
Embraces
the Next Decade with Upgraded Core Strategy of “Smartphone X AIoT”
Xiaomi
Corporation, an internet company with smartphone and smart hardware
connected by an Internet of Things (“IoT”) platform at its core,
today announced its unaudited consolidated results
for the three and six months ended 30 June 2020 ("1H2020”
or “the Period”).
1H
2020 Financial Highlights
- Total revenue amounted to RMB103.24 billion, representing an increase of 7.9% year-over-year (“YoY”), beating market consensus;
- Gross profit was approximately RMB15.26 billion, up 22.3 YoY;
- Profit for the period was approximately RMB6.65 billion, up 29.3% YoY, beating market consensus;
- Non-IFRS adjusted net profit was approximately RMB5.67 billion, down 0.7% YoY, beating market consensus;
- Earnings per share was RMB0.279.
Q2
2020 Financial Highlights
- Total revenue was approximately RMB53.54 billion, up 3.1% YoY and 7.7% quarter-on-quarter (“QoQ”);
- Gross profit was approximately RMB7.70 billion, up 6.1% YoY and 1.9% QoQ;
- Profit for the period was approximately RMB4.49 billion, up 129.8% YoY and 108% QoQ;
- Non-IFRS adjusted net profit was approximately RMB3.37 billion, down 7.2% YoY, but increased by 46.6% QoQ;
- Earnings per share was RMB0.189.
Xiaomi
Corporation said, “In the first half of 2020, despite the impact of
COVID-19 and great global uncertainties, Xiaomi’s diversified
business ecosystem has demonstrated its resilience, as both revenue
and adjusted profits beat market consensus, while our operations
continued to expand. We made the Fortune Global 500 list for the
second time, ranking 422nd,
up 46 places from last year. With 2020 being Xiaomi’s 10th
anniversary, we have upgraded our core strategy to ‘Smartphone X
AIoT’, with AIoT revolving around our core smartphone business,
enabling us to lead the future way of smart living. Looking forward
to the next decade, we will firmly adhere to our ‘three guiding
principles’ - never cease to explore and innovate, continue to
offer products with strong price-to-performance ratio, and seek to
make the coolest products, so as to let everyone in the world enjoy a
better life.”
Firmly
Adhere to the “Three Guiding Principles” and Maintain Xiaomi’s
Position in Premium Smartphone Market
Amid
the challenges brought by COVID-19 on the global
smartphone market,
Xiaomi adhered to three
guiding principles –
“never cease to explore and innovate, continue to offer products
with the price-to-performance ratio”.
Revenue from the smartphones segment was RMB61.952 billion and
RMB31.628 billion in the first half and second quarter of 2020
respectively, and the smartphone shipments reached 28.3 million
units.
According
to Canalys, in the second quarter of 2020, Xiaomi ranked 4th
globally in terms of smartphone shipments, and its market share stood
at 10.1%. In overseas markets, shipments of its premium smartphones,
with retail price of €300 or more, went up by 99.2% YoY in the
second quarter of 2020. Driven by the higher proportion of sales from
mid- to high-end smartphones, the average selling price (“ASP”)
of the Group’s smartphones increased by 11.8% YoY and 7.5% QoQ.
The
Group insisted on implementing the dual-brand strategy and yielded
significant results. Xiaomi’s 5G flagship smartphones, Mi
10 and
Mi 10 Pro,
were launched in February 2020, the shipments have exceeded one
million units within only two months. In August 2020, Xiaomi launched
the Mi
10 Ultra,
which achieved a DXOMARK score of 130 for overall camera performance,
once again ranking 1st
globally at the time of launch. The sales have exceeded RMB400
million after 10 minutes of its debut.
The
Redmi brand continued to make 5G technology accessible to the mass
market. In June 2020, the Group launched the Redmi
9A
series which priced from only RMB499. It then launched the Redmi
K30 Ultra in
August, sporting all-around premium features with
prices starting from only RMB1,999.
It
is worth mentioning that Xiaomi
also launched its smart factory recently with a total investment
amount of RMB600 million, opening up an era of smart and
manufacturing at Xiaomi’s factories. The Mi
10 Ultra is
the first mass-produced ultra-high-end model of the Xiaomi Smart
Factory.
Upgraded
Core Strategy of “Smartphone X AIoT” to Build a Smart Life
Revenue
from the IoT and lifestyle products segment was RMB28.237 billion and
RMB15.253 billion in the first half and second quarter of 2020,
respectively. Xiaomi’s global TV
shipments still amounted to 2.8
million units, achieving YoY
growth despite a decline in the
overall TV market. According to All
View Cloud (“AVC”),
in the second quarter of 2020, the Group’s TV shipments in mainland
China ranked 1st
for the 6th
consecutive quarter and ranked among the top five globally.
In
the second quarter, Xiaomi introduced
two flagship products under the new
Mi TV Master Series, further
expanding its footprint in the
premium market. In July 2020, the Group introduced its first OLED TV,
Mi TV Lux 65”
OLED.
In August 2020, it launched
the second ultra high-end TV within the Mi
TV Master Series-Mi
TV LUX Transparent Edition, which
is the world’s first mass-produced
transparent TV.
To
fulfill the various demands of the consumer worldwide, Xiaomi’s
smart TVs entered more markets,
including Poland, France and Italy during the second quarter. In July
2020, Xiaomi held its first global Xiaomi Ecosystem Product Launch
and released a series of new products, including the Mi
Smart Band 5 and Mi
True Wireless Earphones 2 Basic.
Recently,
Xiaomi Founder, Chairman and CEO Mr. Lei Jun distributed a letter to
employee, announcing that Xiaomi’s core strategy will be upgraded
to “Smartphone
x
AIoT” in the next decade to drive synergistic benefits,
with smartphone remains as the cornerstone to the Group’s business,
while AIoT will build a smart life around smartphones to let Xiaomi
truly lead the future way of smart living
As
of June 30, 2020, the number of connected IoT devices (excluding
smartphones and laptops) on Xiaomi’s IoT platform reached
approximately 271.0 million units, representing a YoY
increase of 38.3%.
The
number of users who have five or more devices connected to Xiaomi’s
IoT platform (excluding smartphones and laptops) increased to over
5.1 million, representing a YoY growth of 63.9%. Meanwhile, the Mi
Home
App had 40.8
million MAU, representing a YoY increase of 34.1%,
in which non-Xiaomi smartphone users accounted for 67.9%. In June
2020, our AI Assistant (“小愛同學”)
had 78.4 million MAU, an increase of 57.1%
YoY.
Xiaomi
continued to strengthen the interconnectivity across products with
the “Xiaomi Share” initiative. “Xiaomi Share” supports
always-on access to music, video and voice calls when switching
across multiple devices. In addition, the Group developed the
multi-screen collaboration function, which support cross-device
photographing and document editing. Going forward, the Group will
continue to enhance the connectivity between smart devices, and offer
more intelligent user experiences and application scenarios, thereby
bringing global Xiaomi users to the forefront of future smart living.
Increasing
Contribution of Diversified Internet Services to the Group’s
Revenue
Revenue
of the internet services segment amounted to RMB11.808 billion and
RMB5.908 billion in the first half and second quarter of 2020
respectively. In
the second quarter of
2020, the MAU of
MIUI increased by 23.3% year-over-year to 343.5 million, while the
mainland China MAU of MIUI was 109.7
million.
In the second quarter of 2020,
advertising revenue increased by 23.2% YoY to RMB3.1
billion, driven by the rapid growth in overseas advertising revenue,
as well as the gradual recovery in advertising budgets in mainland
China. Internet services revenue outside of advertising and gaming
from mainland China smartphones, including those generated from the
Youpin e-commerce platform, fintech business, TV internet services
and overseas internet services, increased by 39.5%
YoY, accounting for 39%
of its total internet services revenue.
In
June 2020, MAU of Xiaomi smart TVs and Mi
Box reached
32.0 million, an increase of 41.8% YoY. As of June 30, 2020, the
number of paid subscribers increased by 33.1% YoY
to 4.0 million.
Business
in Overseas Markets Grows Steadily Despite Headwinds
Remains
the 1st
in Western Europe among major players by Smartphone Shipments Growth
Rate
Revenue
from overseas markets was RMB48.861 billion and RMB24.029 billion in
the first half and second quarter of 2020 respectively. According to
Canalys, in the second quarter of 2020, Xiaomi’s market shares in
terms of smartphone shipments ranked among the top five in 50
countries and regions and reached the top three in 25 of these
markets.
In
the second quarter of 2020, according to Canalys, Xiaomi’s
smartphone shipments grew by 64.9% YoY in Europe, achieving a total
market share of 16.8%, ranking it in the top three for the first
time. In Western Europe, the Group’s smartphone shipments grew
115.9% YoY, accounting for a 12.4% market share. The Group’s
smartphone shipments in Spain grew by 150.6% YoY, ranking 1st
for two consecutive quarters with a 36.8% market share. During the
quarter, Xiaomi ranked 2nd
in France and 4th
in Germany and Italy, in terms of smartphone shipments.
In
Eastern Europe, Xiaomi became the No.1 smartphone company in Ukraine
and Poland in terms of smartphone shipments, with respective market
shares of 37.1% and 27.5%. In addition, in the second quarter of
2020, the Group captured a market share of 30.7% by shipments in the
Indian smartphone market. According to IDC, it retained the No.1
position in the Indian smartphone market for the 12th
consecutive quarter.
Impact
of the COVID-19 outbreak
In
the second quarter of 2020, the COVID-19 pandemic affected Xiaomi’s
global operations to varying degrees. In April and May 2020, several
of the Group’s key markets implemented strict lockdown measures and
the sales were greatly impacted. As business restrictions were
gradually lifted, sales have recovered tangibly.
In
India, strict lockdown measures were imposed starting in late March
and our sales were significantly impacted during the lockdown period.
As India gradually lifted the restrictions during the second quarter
of 2020, consumer demand started to rebound. In July 2020, the
average daily number of smartphone activations in India returned to
72% of the pre-pandemic level recorded in January. In July 2020,
excluding India, the average daily number of overseas smartphone
activations had reached 120% of the pre-pandemic level recorded in
January.
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