Xiaomi: Business blossomed in 1Q20, revenue grew against the trend to 49 billion yuan

According to the 1Q20 financial report released by Xiaomi, the total revenue of Xiaomi was 49.7 billion yuan, a year-on-year increase of 13.6%. All business segments of Xiaomi performed steadily, among which the revenue of smartphones increased by 12.3% year-on-year, the revenue of IOT and life services increased by 7.8% year-on-year, and the revenue of Internet services increased by 38.6% year-on-year. The company's adjusted net profit was 2.3 billion yuan, a year-on-year increase of 10.6%.

In the challenging environment brought about by the epidemic, Xiaomi's smartphone business has demonstrated its ability to fight. According to third-party data, although global smartphone shipments fell by 13% in the first quarter, Xiaomi's smartphone shipments grew by 9% against the trend.

With the end of the epidemic in China and the resumption of work and production by the people, Xiaomi's smartphone and smart TV businesses have also recovered significantly. Currently, smartphone shipments have exceeded pre-epidemic levels, and smart TVs are also rebounding rapidly.

The negative impact of the epidemic on the Chinese market has ended; the Indian market, which was the most severely affected, has also passed the most difficult period, and retail and production are also recovering; overseas markets outside India vary depending on the degree of impact of the epidemic and the pace of resumption of work in various regions.

Taking the European market as an example, the activation volume of smartphones in Europe has recovered to 90% of the pre-epidemic level, while the activation volume of smartphones in Southeast Asia and the Middle East has exceeded the pre-epidemic level.

With the launch of the Xiaomi 10 high-end mobile phone, Xiaomi has initially established a foothold in the high-end market. The shipments of Xiaomi 10 and 10 PRO in the Chinese market have exceeded 1 million units.

In the first quarter, Xiaomi's overseas market revenue accounted for more than 50% of the company's overall revenue for the first time. Xiaomi has become a truly international company.

Here’s how the smartphone business performed:

In the first quarter, smartphone revenue increased by 12.3% year-on-year to 30.3 billion yuan, with shipments reaching 29.2 million units.

Xiaomi launched competitive products to quickly gain market share in the 5G mobile phone market. In the first quarter, Xiaomi's 5G mobile phone market share in China reached 14%.

Thanks to the dual-brand strategy of Xiaomi and Redmi mobile phones, the launch of 5G mobile phones and the popularity of Xiaomi flagship mobile phones, the unit price of Xiaomi smartphones increased by 7.2% year-on-year in the first quarter, with the unit price in the Chinese market increasing by 18.7% and the overseas market increasing by 13.7%.

The new MIUI 12 has many features and enhanced privacy protection, which has been recognized by consumers.

Here is the progress of AIOT business:

In the first quarter, revenue from IOT and life service products increased by 7.8% year-on-year to 13 billion yuan.

The number of connected devices increased by 42.6% year-on-year to 252 million, the number of users using more than 5 devices reached 4.6 million, the number of monthly active users of Xiao Ai reached 70.5 million, and the number of monthly active users of Mi Home APP increased by 53.4% ​​year-on-year to 40 million.

Despite the weak global TV market and the impact of the epidemic, Xiaomi's smart TV shipments still increased by 3% year-on-year to 2.7 million units.

During the epidemic, despite the impact of the inability to sell and deliver large appliances, Xiaomi's main IOT products still maintained strong growth. See the figure below for specific data.

Then let’s look at the Internet services business.

In the first quarter, Xiaomi's Internet business revenue increased by 38.6% year-on-year to 5.9 billion yuan, of which advertising revenue was 2.7 billion yuan, a year-on-year increase of 16.6%, game revenue was 1.5 billion yuan, a year-on-year increase of 80.5%, and other Internet service revenue was 1.8 billion yuan, a year-on-year increase of 52.1%.

Xiaomi's Internet business user base maintained strong growth, with MIUI users reaching 330 million worldwide, up 26.7% year-on-year. Monthly active users of smart TVs increased 46.8% year-on-year to 30.4 million units, of which the number of paying users exceeded 4.3 million.

Despite the reduction in advertisers' spending due to the epidemic, Xiaomi's advertising revenue still increased by 16.6% year-on-year to 2.7 billion yuan.

The revenue of the gaming business benefited from the increased time users spent in home isolation. In addition, the proportion of Xiaomi high-end mobile phone users increased, and spending from high-end mobile phone users also drove the growth of overall ARPU.

In addition to advertising and gaming businesses in the Chinese market, revenue from financial technology, Youpin e-commerce, smart TV network services and overseas Internet businesses are also growing rapidly, accounting for 38.1% of Internet service revenue.

Let’s take a look at the progress of overseas markets:

Xiaomi's overseas market revenue was 24.8 billion yuan, a year-on-year increase of 47.8%, accounting for 50% of total revenue.

Xiaomi's overseas markets saw strong revenue growth, with Europe, Latin America and Africa growing by 58.3%, 236.1% and 284.9% respectively.

Amid declining smartphone shipments in Western Europe, Xiaomi's smartphone sales grew against the trend and ranked first in Spain for the first time.

Xiaomi currently ranks first in the Indian and Nepal markets, and its market share continues to expand.

Here is the company's overall financials:

In the first quarter, Xiaomi achieved rapid growth in revenue, gross profit and net profit.

The gross profit margin of each business expanded, and the company's overall gross profit margin increased to 15.2%.

During the epidemic, the company also effectively controlled operating expenses.

Operating working capital was also managed effectively.

Due to the shortage of raw materials caused by the epidemic, the inventory turnover cycle has increased, but the situation has now improved.

Overall, in the face of macroeconomic difficulties caused by the epidemic, Xiaomi has been very resilient, with all of its businesses maintaining steady growth, achieving gross profit expansion and good profits.