Xiaomi Corporation, an internet company with smartphones and smart hardware connected by an Internet of Things (“IoT”) platform at its core, today announced its audited consolidated results for the first quarter of 2019 ended March 31, 2019 (“1Q2019”).
Leveraging the effective implementation of its “Smartphone + AIoT” dual-engine strategy, the Group recorded revenue of approximately RMB43.8 billion, representing a year-on-year increase of 27.2%. The Group focused on the rapid expansion in international markets, with revenue growing 34.7% year-on-year to RMB16.8 billion. Net profit for the first quarter was approximately RMB3.2 billion and adjusted net profit (Non-IFRS Measure) was approximately RMB2.1 billion, representing a year-on-year increase of 22.4%, or 12.3% compared to the last quarter.
1Q2019 Financial Highlights
- Total revenue was RMB43.8 billion, an increase of 27.2% year-on-year
- Gross profit was RMB5.2 billion, an increase of 21.3% year-on-year
- Net profit was RMB3.2 billion
- Non-IFRS adjusted net profit was RMB2.1 billion, an increase of4% year-on-year
- Earnings per share were RMB0.132
Xiaomi Founder, Chairman and CEO Mr. Lei Jun said: “The first quarter of 2019 was the first quarter after the launch of our dual-engine strategy of ‘Smartphone + AIoT’ and a series of key adjustments. Over the past year, we made significant improvements and adjustments in our core strategies, management structure, technology research and development system, product and brand development system, etc. Looking ahead, we will be investing RMB10 billion in the development of ‘All in AIoT’ in the next 5 years, to capture the development opportunities in the age of artificial intelligence (AI) and IoT, thus laying a solid foundation for Xiaomi’s development in the next 5 to 10 years. We will replicate our success in the enhancement and adjustment of business strategies in the domestic market to our international markets.”
Multi-brand strategy achieved satisfactory initial results and smartphones gained a foothold in the domestic high-end market
In the first quarter of 2019, Xiaomi’s smartphone segment recorded approximately RMB27.0 billion in revenue, representing an increase of 16.2% over the corresponding period last year, indicating a series of nimble strategic adjustments in the Group’s smartphone segment are starting to bear fruit. The Group successfully executed its multi-brand strategy by constantly improving its product portfolio and dedicating efforts to making Redmi an independent brand. The Redmi brand is positioned to pursue the optimal price-performance ratio and focus on online channels, while the Xiaomi brand will remain focused on pursing advanced technologies and delivering the ultimate user experience. During the reporting period, due to the continuous optimization of the product portfolio and the market recognition of the new smartphone models, the average sales price (“ASP”) of the smartphones in mainland China and in overseas markets achieved a year-on-year growth of 29.9% and 12.1% respectively.
In the first quarter of 2019, we released new flagship models of our Mi 9 series and Redmi Note 7 series. As of March 31, 2019, the shipments of Redmi Note 7 series exceeded 4 million units and the supply of Mi 9 series smartphones surpassed 1.5 million units. According to International market research organization IDC, Xiaomi’s smartphone sales volume in the first quarter of 2019 reached 27.9 million units, ranking 4th globally.
“Smartphone + AIoT” dual-engine strategy implementation goes smoothly and IoT platform continually maintains a leading position
During the first quarter of 2019, revenue of the IoT and lifestyle products segment rose by 56.5% to RMB12.0 billion over the corresponding period of 2018, maintaining a rapid growth rate. During the reporting period, the Group’s smart TVs continued to lead the way, ranking 1st in terms of shipments for two consecutive quarters in mainland China. As of March 31, 2019, global shipments of the smart TVs reached 2.6 million units, representing a year-on-year growth of 99.8%. Excluding smart TVs and laptops, the Group’s ecosystem products, such as Mi Band, Mi Air Purifier and Mi Electric Scooter, also achieved robust sales growth. In addition, the Group’s IoT products won 25 international design awards, reflecting the products wide market recognition.
As of March 31, 2019, the number of connected IoT devices (excluding smartphones and laptops) on Xiaomi’s IoT platform reached approximately 171 million units, a quarter-over-quarter increase of 13.7% and a year-on-year increase of 70.0%. As of March 31, 2019, its AI assistant (“小愛同學”) had more than 45.5 million monthly active users (“MAU”), making it one of the most used AI voice interactive platforms in mainland China, which encouraged more third-party organisations to join this open IoT platform. On March 7, 2019, the Group established the AIoT Strategy Committee to help its AIoT development and enhance synergy among our departments.
Continued to diversify internet services revenue.
Revenue from our internet services segment grew 31.8% year-on-year to RMB4.3 billion in the first quarter of 2019. Advertising revenue grew 21.8% year-on-year to RMB2.3 billion. Revenue from gaming grew 6.8% year-on-year to RMB823.1 million. Its other internet value-added services grew 96.4% year-on-year to RMB1.2 billion, primarily due to the rapid growth in revenue from its internet finance business and Youpin e-commerce platform.
In March 2019, the MAU of MIUI rose 37.3% to 260.9 million, while the MAU of its smart TVs and Mi Boxes achieved 55.1% year-on-year growth, reaching 20.7 million.
Xiaomi continued to diversify its internet services revenue. Internet services revenue outside of advertising and gaming from smartphones in China, including those generated from TV internet services, overseas internet services, Youpin e-commerce, and internet finance business, accounted for 31.8% of the total internet services revenue.
Strengthens expansion of the international market; broadens retail network
In the first quarter of 2019, Xiaomi’s revenue from international markets grew 34.7% year-on-year to RMB16.8 billion.
Through Xiaomi’s dedicating efforts, it has built a strong market position in the India market. Our smartphones have remained number one in market share position by shipments for seven consecutive quarters in India. Xiaomi dominated the online smartphone market with 51% market share by shipments in 2018 and has retained this number one market share position for ten consecutive quarters. It has a market share of over 20% for the India offline smartphone
sales in the fourth quarter of 2018, and are seeing strong momentum in our offline expansion. Following the success of smartphones, Xiaomi has been introducing more IoT and lifestyle products into the India market and have become market leaders in several product categories including smart TVs and wearables.
According to Canalys, during the reporting period, Xiaomi ranked in the top 5 in over 40 countries and regions in terms of shipments, remained number one in market share position by shipments for seven consecutive quarters in India; and continued to maintain a high growth rate, ranking 4th in terms of smartphone shipments for Western Europe, with shipments to the region growing by 115.1% year-on-year.
In addition, Xiaomi is dedicated to building and expanding its new retail network in overseas markets. As of March 31, 2019, there were 480 authorized Mi Home stores overseas, representing a 93.5% year-on-year growth, of which 79 stores were in India. Meanwhile, Xiaomi explored new markets in Africa and Latin America, entering into a cooperation agreement with the African e-commerce platform Jumia to sell Xiaomi products and jointly promote the penetration of smartphones in Africa.