Net Profit Reaches RMB2.48 billion, Significantly Beats Market Consensus
(Hong Kong, November 19, 2018) – Xiaomi Corporation (“Xiaomi” or the “Group”; Stock Code: 1810), an internet company with smartphones and smart hardware connected by an Internet of Things (“IoT”) platform at its core, today announced its unaudited consolidated results for the third quarter of 2018 ended September 30, 2018 (“3Q2018”).
Upholding its unique and powerful “triathlon” business model, Xiaomi’s operating performance was robust in the third quarter of 2018. The Group recorded revenue of approximately RMB50.846 billion, representing a year-on-year increase of 49.1%, among which international revenue grew 112.7% year-on-year to RMB 22.3 billion, accounting for 43.9% of its total revenue. Net profit for the third quarter was approximately RMB 2.481 billion. Adjusted profit (Non-IFRS Measure) was approximately RMB 2.885 billion, representing a year-on-year increase of 17.3%, and a quarter-on-quarter increase of 36.3%.
3Q2018 Financial Highlights
- Total revenue was RMB50,846.2 million, an increase of 49.1% year-on-year
- Gross profit was RMB6,578 million, an increase of 26.4% year-on-year
- Net profit was RMB2,481 million
- Non-IFRS adjusted profit was RMB2,885 million, an increase of 17.3% year-on-year
- Earnings per share were RMB0.117
Xiaomi Founder, Chairman and CEO Mr. Lei Jun, said: “In the third quarter of 2018, we successfully built on Xiaomi’s impressive heritage, opening up several new avenues on our journey to achieve significant breakthroughs. The strategies to which Xiaomi adheres, such as strengthening the performance of the high-end market, accelerating the development of new retail channels and focusing on AI development and application, all yielded remarkable results during the reporting period. Furthermore, Xiaomi’s new high-potential businesses, including the monetization of internet services apart from smartphones in China, the globalization of our IoT products and our entrance into the white goods market, have all showed promising beginnings. Thanks to all these achievements, we are extremely confident about Xiaomi’s future.”
3Q2018 Results Review
Rapid growth across all business segments. In the third quarter of 2018, Xiaomi’s smartphones segment recorded revenue of approximately RMB35.0 billion, representing an increase of 36.1% year-on-year, which was mainly driven by increases in both smartphone sales volume and the average selling price (“ASP”). As of October 26, 2018, Xiaomi’s smartphone shipments exceeded 100 million units, successfully achieving our full-year target more than two months ahead of schedule. Revenue from the IoT and lifestyle products segment grew the fastest year-on-year by 89.8% to RMB10.8 billion. Meanwhile, revenue from our smart TV and laptop sales increased by 100.3% to RMB4,227.2 million in the third quarter of 2018. In addition, several of our ecosystem products, such as the Mi Band, Mi Electric Scooter and Mi VR headset, experienced robust sales growth. Revenue from the internet services segment grew 85.5% year-on-year to RMB4.7 billion in the third quarter of 2018, driven primarily by increasing monetization on Chinese mainland. Advertising revenue grew by 109.8% year-on-year to RMB3.2 billion, driven by the continuous optimization of our recommendation algorithm, users’ increasing engagement of our internet services, and higher pre-installation revenue.
Consolidated our position in the high-end smartphone market in Mainland. In the third quarter of 2018, Xiaomi continued to optimize its product portfolio to strengthen its presence in the mid- to high-end smartphone market in Chinese mainland. During the reporting period, our smartphone average selling price (“ASP”) on Chinese mainland continued its ascent from the previous quarter, increasing 16% year-on-year and 4% quarter-on-quarter. Our smartphone ASP outside Chinese mainland also increased by 18% year-on-year, attributable to the increase in the proportion of shipments to Western Europe. The rising proportion of mid- to high-end smartphone users has laid a better foundation for the monetization of Xiaomi’s internet services segment in the future.