Ladies and gentlemen, thank you for standing by and welcome to Xiaomi 2022 interim result announcement conference call. Today's conference is being recorded. If you have any objections, you may now disconnect at this time. If you have any questions you would like to raise during the question and answer section later, please press star 1 on your telephone keypad to register your questions. Should you wish to cancel your question, please press star 2. I'd now like to hand over the conference to your host toda ...

Financial Data and Key Metrics Changes - Total revenue for the first quarter of 2022 reached RMB 73.4 billion, with an adjusted net profit of RMB 2.9 billion, which included RMB 425 million in expenses related to smart EV and other new initiatives [2][5][12] - The overall gross margin declined by 1.1 percentage points year-over-year to 17.3%, with smartphone gross margin decreasing to 9.9% [12][13] - R&D expenses increased by 60% year-over-year to RMB 3.5 billion, representing 4.8% of total revenue [3][12][13] Business Line Data and Key Metrics Changes - Smartphone revenue was RMB 45.8 billion, with global shipments of 38.5 million units, maintaining the number three position globally with a market share of 12.6% [5][7][12] - IoT revenue reached RMB 19.5 billion, an increase of 6.8% year-over-year, with a record high gross margin of 15.6% [9][12] - Internet services revenue was RMB 7.1 billion, up 8.2% year-over-year, with advertising revenue growing by 16.2% to RMB 4.5 billion [11][12] Market Data and Key Metrics Changes - Xiaomi maintained its number three position in global smartphone shipments, ranking top three in 49 markets and top five in 68 markets [2][8] - In Mainland China, MIUI MAU reached 136 million, a net increase of 17 million year-over-year [8][11] - Overseas internet services revenue increased by over 70%, contributing nearly 22% of total internet service revenue [3][11] Company Strategy and Development Direction - The company is focusing on optimizing cost structure and improving operational efficiency while investing in new initiatives, including smart EV development [2][4] - Xiaomi continues to strengthen its premium smartphone market position, with a strategy that includes expanding offline retail presence and enhancing user experience through innovative technology [3][6][7] - The company is actively promoting ESG initiatives and has set multiple environmental targets [4][13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged significant challenges from supply shortages, COVID-19, and macroeconomic headwinds, but expressed confidence in the company's resilience and growth potential [2][5] - The outlook for the smartphone market remains uncertain, but improvements in supply and promotional events are expected to drive shipments in the second quarter [15][16] - The IoT business is anticipated to face challenges due to logistical issues and macroeconomic conditions, particularly in Europe, but management remains optimistic about growth opportunities [17][19] Other Important Information - The company has merged various departments to enhance operational efficiency and promote sustainable growth [4][12] - Xiaomi's cash resources remain robust, reaching RMB 95 billion as of the end of March [13] Q&A Session Summary Question: What is the management's take on the demand outlook for smartphones in the following quarters? - Management noted uncertainty in the global environment and COVID-19 impacts but observed potential improvements in supply for Q2, with promotional events expected to drive shipments [15][16] Question: Can you explain the reason for the IoT gross margin improvement to 15.6%? - The improvement was attributed to lower component costs, particularly in the TV business, and higher margins from new product categories [17] Question: How does the company view its competitive strength in Africa and Latin America? - Management highlighted strong growth in Latin America, with a market share of about 15%, and emphasized the potential for further growth through partnerships with carriers [20][21] Question: What impact has the pandemic had on the company's main businesses? - The pandemic, particularly in Shanghai, affected store operations and logistics, but improvements are expected as the situation stabilizes [22][23]

Financial Performance - Xiaomi Corporation reported total revenue of RMB 73.35 billion for Q1 2022, a decrease of 4.6% year-on-year[1]. - Adjusted net profit for Q1 2022 was RMB 2.86 billion, down 52.9% compared to RMB 6.07 billion in Q1 2021[1]. - The company incurred a loss of RMB 911.4 million in operating profit for Q1 2022, compared to a profit of RMB 8.16 billion in Q1 2021[1]. - The company recorded a net loss of RMB 500 million in Q1 2022, compared to a profit of RMB 7.8 billion in Q1 2021[38]. - The gross margin fell from 18.4% in Q1 2021 to 17.3% in Q1 2022, primarily due to a higher proportion of lower-margin advertising revenue[30]. - The company reported a net loss of RMB 530,554,000 for the three months ended March 31, 2022, compared to a profit of RMB 7,788,907,000 for the same period in 2021, representing a significant decline in performance[72]. - Total comprehensive loss for the period amounted to RMB 793,577,000, a stark contrast to the total comprehensive income of RMB 8,193,277,000 in the previous year[72]. Revenue Breakdown - Revenue from overseas markets reached RMB 37.5 billion, accounting for 51.1% of total revenue in Q1 2022[4]. - Revenue from the smartphone segment was RMB 45,762,689,000, while the IoT and consumer products segment generated RMB 19,477,357,000, contributing to a total revenue of RMB 73,351,502,000 for the quarter[78]. - Revenue from Mainland China was RMB 35,889,645 thousand, accounting for 48.9% of total revenue, down from 51.3% in the same period last year[80]. - Revenue from other global regions was RMB 37,461,857 thousand, representing 51.1% of total revenue, an increase from 48.7% in the previous year[80]. Smartphone Performance - Global smartphone shipments reached 38.5 million units in Q1 2022, maintaining a market share of 12.6%[5]. - Smartphone revenue fell by 11.1% year-on-year to RMB 45,762.7 million, with shipments down 22.1% to 38.5 million units[23]. - The average selling price (ASP) of smartphones increased by 14.1% year-on-year to RMB 1,189 in Q1 2022[4]. - Xiaomi's smartphone market share in mainland China was 13.9%, ranking fifth in Q1 2022[6]. - In Europe, Xiaomi's smartphone market share was 19.7% in Q1 2022, maintaining the third position, with significant growth in operator channel market share[15]. IoT and Consumer Products - Xiaomi's IoT platform connected 478.1 million devices as of March 31, 2022, representing a 36.2% year-on-year growth[2]. - Xiaomi's IoT and lifestyle products revenue reached RMB 19.5 billion in Q1 2022, representing a year-on-year growth of 6.8% with a gross margin of 15.6%, the highest in a single quarter[9]. - Revenue from smart home appliances grew over 25% year-on-year in Q1 2022, indicating strong demand in this category[10]. - IoT and consumer products revenue increased by 6.8% from RMB 18.2 billion in Q1 2021 to RMB 19.5 billion in Q1 2022, driven by strong sales of the Xiaomi Pad 5 series and smart home appliances[24]. Internet Services - Internet services revenue for Q1 2022 was RMB 7.1 billion, a year-on-year increase of 8.2%, driven by growth in advertising and gaming sectors[11]. - Xiaomi's overseas internet services revenue reached RMB 1.6 billion in Q1 2022, a year-on-year growth of 71.1%, accounting for 21.9% of total internet services revenue[12]. - Xiaomi's advertising revenue reached RMB 4.5 billion in Q1 2022, a year-on-year increase of 16.2%, benefiting from growth in search and brand advertising[11]. - Internet services revenue declined by 2.2% to RMB 7.11 billion, attributed to lower pre-installed business income related to smartphone shipments[43]. Research and Development - Research and development expenditure for Q1 2022 was RMB 3.5 billion, reflecting a 16.0% increase year-on-year[3]. - R&D expenses increased by 16.0% from RMB 3 billion in Q1 2021 to RMB 3.5 billion in Q1 2022, attributed to higher personnel costs and innovation-related expenditures[30]. - R&D expenses in Q1 2022 were RMB 3.49 billion, compared to RMB 3.01 billion in Q4 2021, reflecting a year-over-year increase[71]. Cash Flow and Financing - Cash and cash equivalents amounted to RMB 34.7 billion as of March 31, 2022, up from RMB 23.5 billion as of December 31, 2021[60]. - The company issued USD 600 million 3.375% senior notes due in 2030, guaranteed unconditionally and irrevocably by the company[61]. - The company issued USD 800 million 2.875% senior notes due in 2031 and USD 400 million 4.100% green bonds due in 2051, both guaranteed by the company[62]. - The net cash generated from investing activities in Q1 2022 was RMB 17.57 billion, primarily due to a net change in short-term investments of RMB 11.5 billion[65]. - The net cash generated from financing activities in Q1 2022 was RMB 2.35 billion, an increase from a net cash used of RMB 0.55 billion in Q4 2021[63]. Market Expansion and Strategy - The company continues to evaluate opportunities for market expansion and new product development to drive future growth[89]. - The company plans to enhance store efficiency through improved collaboration with operators and optimizing product sales structure[17]. - The company has maintained compliance with corporate governance codes and has not faced any significant litigation or arbitration as of March 31, 2022[96].

Revenue and Profit - Revenue for 2021 reached RMB 328.3 billion, a significant increase from RMB 245.9 billion in 2020[30] - Gross profit for 2021 was RMB 58.3 billion, up from RMB 36.8 billion in 2020[30] - Operating profit for 2021 stood at RMB 26.0 billion, compared to RMB 24.0 billion in 2020[30] - Net profit attributable to the company's owners in 2021 was RMB 19.3 billion, slightly down from RMB 20.4 billion in 2020[30] - Adjusted net profit for 2021 was RMB 22.0 billion, up from RMB 13.0 billion in 2020[30] - Total revenue reached RMB 328.3 billion, a year-on-year increase of 33.5%[33] - Adjusted net profit was RMB 22 billion, up 69.5% year-on-year[33] - Gross profit rose by 58.5% from RMB 36.8 billion in 2020 to RMB 58.3 billion in 2021, with gross margin improving from 14.9% to 17.7%[73] - Adjusted net profit surged by 69.5% from RMB 13.0 billion in 2020 to RMB 22.0 billion in 2021[84] - Annual profit for 2021 was RMB 19,283,235 thousand with a net profit margin of 5.9%[143] - Non-IFRS annual profit for 2021 was RMB 22,039,474 thousand with a net profit margin of 6.7%[143] Assets and Liabilities - Total assets for 2021 amounted to RMB 292.9 billion, up from RMB 253.7 billion in 2020[31] - Non-current assets increased to RMB 107.0 billion in 2021 from RMB 77.4 billion in 2020[31] - Current assets for 2021 were RMB 185.9 billion, compared to RMB 176.3 billion in 2020[31] - Total equity attributable to the company's owners in 2021 was RMB 137.2 billion, up from RMB 123.7 billion in 2020[31] - Non-current liabilities for 2021 were RMB 39.7 billion, a significant increase from RMB 21.7 billion in 2020[31] - Cash and cash equivalents as of December 31, 2021, were RMB 23.5 billion[145] - Total cash resources as of December 31, 2021, were RMB 106 billion[145] - Asset-liability ratio as of December 31, 2021, was -31.1%, indicating a net cash position[146] - Total borrowings as of December 31, 2021, were RMB 26.2 billion, compared to RMB 25.9 billion as of September 30, 2021[153] Smartphone Business - Global smartphone shipments reached 190.3 million units, a year-on-year increase of 30.0%[36] - High-end smartphone shipments (priced above RMB 3,000 in China or €300 overseas) exceeded 24 million units, up from 10 million units in 2020[37] - Smartphone revenue reached RMB 208.9 billion, a year-on-year increase of 37.2%[39] - Smartphone segment revenue increased by 37.2% from RMB 152.2 billion in 2020 to RMB 208.9 billion in 2021, driven by higher shipment volume and ASP[63] - Smartphone shipments grew by 30.0% from 146.4 million units in 2020 to 190.3 million units in 2021, with ASP rising 5.6% from RMB 1,039.8 to RMB 1,097.5 per unit[63] - High-end smartphone shipments increased from 7% of total smartphone shipments in 2020 to 13% in 2021[63] - Smartphone shipments in Q4 2021 increased by 4.4% YoY to 44.1 million units, with ASP rising 13.3% to RMB 1,143.6 per unit[93] - Smartphone segment sales increased by 8.7% from RMB 41.7 billion in Q3 2021 to RMB 45.3 billion in Q4 2021, driven by higher shipment volumes[124] IoT and Lifestyle Products - IoT and lifestyle products revenue reached RMB 85 billion, a year-on-year increase of 26.1%[45] - IoT and lifestyle products revenue grew by 26.1% from RMB 67.4 billion in 2020 to RMB 85.0 billion in 2021, driven by smart TVs, Mi Pad 5 series, and smart air conditioners[64] - IoT and lifestyle product revenue in Q4 2021 grew 19.1% YoY to RMB 25.067 billion, driven by strong sales of smart TVs, tablets, and smartwatches[94] - IoT and lifestyle product revenue increased by 19.7% from RMB 20.9 billion in Q3 2021 to RMB 25.1 billion in Q4 2021, driven by higher sales of smart TVs, tablets, and robotic vacuum cleaners[119] - IoT and lifestyle products segment sales grew by 17.8% from RMB 18.5 billion in Q3 2021 to RMB 21.8 billion in Q4 2021, due to increased sales of IoT and lifestyle products[125] Internet Services - Internet service revenue reached RMB 28.2 billion in 2021, a year-over-year increase of 18.8%, with overseas internet service revenue growing 79.5% year-over-year in Q4 2021[47] - Internet services revenue increased by 18.8% from RMB 23.8 billion in 2020 to RMB 28.2 billion in 2021, with overseas internet services revenue surging 84.3% from RMB 2.7 billion to RMB 5.0 billion[66] - Internet service revenue in Q4 2021 increased by 17.7% YoY to RMB 7.27 billion, with overseas internet service revenue surging 79.5% to RMB 1.6 billion[96] - Internet services segment sales decreased by 10.3% from RMB 1.9 billion in Q3 2021 to RMB 1.7 billion in Q4 2021, primarily due to lower costs in other value-added services[126] R&D and Innovation - R&D expenditure reached RMB 13.2 billion, a year-on-year increase of 42.3%[36] - R&D expenditure reached RMB 13.2 billion in 2021, a year-on-year increase of 42.3%[54] - The company plans to invest over RMB 100 billion in R&D over the next five years[54] - R&D expenses increased by 42.3% from RMB 9.3 billion in 2020 to RMB 13.2 billion in 2021, mainly due to higher R&D personnel compensation[74] - R&D expenses increased by 24.1% from RMB 3.1 billion in Q4 2020 to RMB 3.9 billion in Q4 2021, primarily due to higher R&D personnel compensation and development-related expenses[104] - R&D expenses rose by 19.0% from RMB 3.2 billion in Q3 2021 to RMB 3.9 billion in Q4 2021, mainly due to increased development-related expenses[129] Overseas Market Performance - Overseas revenue accounted for 49.8% of total revenue, reaching RMB 163.6 billion, up 33.7% year-on-year[38] - Overseas market revenue reached RMB 163.6 billion in 2021, a year-over-year increase of 33.7%, accounting for 49.8% of total revenue[49] - Shipments of premium smartphones priced at €300 or above in overseas markets grew by over 160% year-over-year in 2021[50] User Base and Ecosystem - MIUI monthly active users reached 508.9 million, a year-on-year increase of 28.4%[36] - Connected IoT devices (excluding smartphones, tablets, and laptops) reached 434 million, up 33.6% year-on-year[36] - Global MIUI monthly active users reached 508.9 million in December 2021, a year-over-year increase of 28.4%[47] - AIoT connected devices (excluding smartphones, tablets, and laptops) reached 434 million by the end of 2021, a year-over-year increase of 33.6%[51] Advertising and Marketing - Advertising revenue reached RMB 18.1 billion in 2021, a year-over-year increase of 42.3%, driven by increased smartphone shipments and user base expansion[48] - Sales and marketing expenses increased by 22.9% from RMB 5.1 billion in Q4 2020 to RMB 6.3 billion in Q4 2021, driven by higher logistics and advertising costs[105] - Sales and marketing expenses increased by 28.1% from RMB 4.9 billion in Q3 2021 to RMB 6.3 billion in Q4 2021, driven by higher advertising and promotional expenses[130] Investments and Acquisitions - The company invested in over 390 companies with a total book value of RMB 60.3 billion, a 25.7% increase year-on-year[60] - The total book value of investments as of December 31, 2021, was RMB 60.3 billion, a 25.7% year-over-year increase[157] - Xiaomi completed the acquisition of Zimi on July 5, 2021, and Deepmotion Tech Limited on September 22, 2021, making both wholly-owned subsidiaries[158] - Fair value changes of investments recorded a gain of RMB 3.9 billion in Q4 2021, compared to a loss of RMB 2.0 billion in Q3 2021, due to improved market sentiment in China's tech sector[132] - Share of net profit from equity investments increased from RMB 45.1 million in Q3 2021 to RMB 247.1 million in Q4 2021, mainly due to dilution gains from Kingsoft Cloud[133] - Other net losses increased from RMB 0.5 billion in Q3 2021 to RMB 3.1 billion in Q4 2021, primarily due to impairment of equity investments, partially offset by gains from the disposal of investee companies[135] Cash Flow and Financing - Operating cash flow for 2021 was RMB 9.785 billion, a significant decrease from RMB 21.879 billion in 2020[85] - Investment cash outflow for 2021 was RMB 45.008 billion, primarily due to short-term bank deposits (RMB 13.9 billion), long-term investments (RMB 12.9 billion), and long-term bank deposits (RMB 8.4 billion)[87] - Financing cash inflow for 2021 was RMB 4.5 billion, driven by increased borrowings (RMB 9.2 billion) and funds from investors (RMB 3.5 billion), partially offset by share repurchases (RMB 7 billion)[88] - Capital expenditures for 2021 totaled RMB 20.268 billion, including RMB 7.169 billion in capital spending and RMB 13.099 billion in long-term investments[89] - Net cash generated from operating activities in Q4 2021 was RMB 11.7317 billion, compared to a net cash used in operating activities of RMB 10.2307 billion in Q3 2021[149] - Net cash used in investing activities in Q4 2021 was RMB 20.0715 billion, primarily due to changes in short-term investments at fair value (RMB 9.3 billion) and short-term bank deposits (RMB 7.2 billion)[151] - Net cash used in financing activities in Q4 2021 was RMB 550.1 million, mainly due to share repurchases (RMB 500 million) and lease liability payments (RMB 400 million), partially offset by an increase in borrowings (RMB 600 million)[152] - Capital expenditures for Q4 2021 totaled RMB 4.6025 billion, including RMB 2.0103 billion in capital expenditures and RMB 2.5922 billion in long-term investments[154] Smart Electric Vehicle Business - Smart electric vehicle business has a team of over 1,000 people, with mass production expected in the first half of 2024[56] Employee and Shareholder Information - As of December 31, 2021, Xiaomi had 33,427 full-time employees, including 14,592 R&D personnel, with total compensation expenses (including share-based compensation) of RMB 13.8 billion, a 39.4% increase year-over-year[159] - The company has conditionally granted a total of 400,906,827 unexercised B-class shares under the Pre-IPO Employee Share Option Scheme, representing approximately 1.6% of the company's issued shares as of the last practicable date[185] - During the reporting period, 71,118,410 B-class shares were exercised under the Pre-IPO Employee Share Option Scheme[185] - The total number of B-class shares that may be issued upon the exercise of all options granted under the Post-IPO Share Option Scheme and any other share option plans is 1,568,094,311, not exceeding 10% of the issued B-class shares as of the listing date, representing approximately 6.28% of the issued shares as of the last practicable date[190] - As of December 31, 2021, 233,500,000 options have been granted under the Post-IPO Share Option Scheme, with a total of 1,446,194,311 B-class shares available for issuance, representing approximately 5.79% of the company's issued share capital as of the last practicable date[195] - Total employee stock options granted under the post-IPO employee stock option plan amounted to 121,900,000 shares[196] - The maximum number of shares issuable under Xiaomi Financial Stock Option Plan II is 150,000,000 shares[199] - Xiaomi Financial Stock Option Plan I has a maximum issuable share limit of 42,070,000 shares, subject to adjustment for stock splits or dilution[199] - Lei Jun cannot be granted stock options if it would increase his beneficial interest in Xiaomi Financial above 28.0467%[199] - Stock options under Xiaomi Financial Stock Option Plan I can be exercised within 20 years from the grant date[200] - Xiaomi Financial Stock Option Plan II allows exercise of options without a minimum holding period[200] - Zhou Shouzi was appointed as an executive director effective March 24, 2021[197] - Xiaomi Financial Stock Option Plan II includes a wide range of eligible participants, including employees, directors, consultants, and business partners[198] - The exercise price for Xiaomi Financial stock options is determined at the time of grant[198] - Xiaomi Financial Stock Option Plan I aims to incentivize participants to enhance the value of Xiaomi Financial for shareholders[198] Corporate Governance and Financial Instruments - Xiaomi Best Time International Limited issued $600 million 3.375% senior notes due 2030[147] - Xiaomi Best Time International Limited issued $855 million zero-coupon convertible bonds due 2027[147] - Xiaomi issued $800 million in 2.875% senior bonds due in 2031 and $400 million in 4.100% senior green bonds due in 2051, both unconditionally and irrevocably guaranteed by the company[148] - The company's subsidiary, Xiaomi Best Time International Limited, issued $600 million of 3.375% senior notes due 2030, guaranteed by the company[170] - Xiaomi Best Time International Limited issued $855 million of zero-coupon guaranteed convertible bonds due 2027, with an initial conversion price of HK$36.74 per share[170] - Xiaomi Best Time International Limited issued $800 million of 2.875% senior notes due 2031 and $400 million of 4.100% senior green bonds due 2051, both guaranteed by the company[171] - The company repurchased a total of 418,697,200 Class B shares during the reporting period, with a total consideration of approximately HK$9,525,404,847[174] - The company's distributable reserves as of December 31, 2021, amounted to RMB 56,918.5 million[173] - The company made charitable donations of approximately RMB 22.5 million during the reporting period[169] - The company's total bank loans and borrowings as of December 31, 2021, are detailed in the annual report's "Management Discussion and Analysis" section and Note 34 of the consolidated financial statements[168] - The company's property and equipment changes during the reporting period are detailed in Note 15 of the consolidated financial statements[167] - The company's subsidiary details are provided in Note 12 of the consolidated financial statements[166] - The company's business review, including financial performance analysis, future development indicators, and major risks, is detailed in the "Chairman's Report" and "Management Discussion and Analysis" sections of the annual report[165] Other Financial Metrics - The hardware business's comprehensive net profit margin was less than 2.0% in 2021, fulfilling the company's commitment[60] - The company conducted privacy and data security checks on over 85,000 apps in the third quarter of 2021[57] - Q4 2021 revenue increased by 21.4% YoY to RMB 85.575 billion, with smartphone revenue contributing 59% (RMB 50.464 billion), IoT and lifestyle products 29.3% (RMB 25.067 billion), and internet services 8.5% (RMB 7.27 billion)[92] - Other revenue in Q4 2021 surged 363.3% YoY to RMB 2.775 billion, mainly due to the sale of apartment buildings and materials[97] - Cost of sales in Q4 2021 increased by 19.9% YoY to RMB 70.916 billion, with smartphone cost of sales rising 18.8% to RMB 45.346 billion[98][99] - IoT and lifestyle product division sales cost increased by 17.8% from RMB 18.5 billion in Q4 2020 to RMB 21.8 billion in Q4 2021, driven by higher sales of IoT and lifestyle products[100] - Internet services division sales cost decreased by 10

Financial Data and Key Metrics Changes - In 2021, total revenue reached 328.3 billion RMB, up almost 34% year-over-year, and adjusted net profit reached 22 billion RMB, up almost 70% [2][4][14] - In Q4 2021, total revenue was 85.6 billion RMB, up 21.4% year-over-year, and adjusted net profit was 4.5 billion RMB, up nearly 40% year-over-year [4][12] - Gross margin for the full year 2021 increased to 17.7%, a record high, with internet services gross margin reaching 76.1% in Q4 2021 [14][12] Business Segment Data and Key Metrics Changes - Smartphone revenue for the full year reached 209 billion RMB, up more than 37% year-over-year, with shipments exceeding 190 million units, up 30% year-over-year [6][9] - IoT product revenue reached 85 billion RMB for the full year, an increase of 26.1% year-over-year, with Q4 revenue at 25.1 billion RMB, up 19.1% year-over-year [9][10] - Internet services revenue reached 28.2 billion RMB for the full year, up 18.8% year-over-year, with Q4 revenue at 7.3 billion RMB, up 17.7% year-over-year [12][14] Market Data and Key Metrics Changes - Xiaomi ranked number three globally in smartphone shipments and number one in 14 markets, with a market share of 23% in Europe and number one in Spain and India [2][8] - In mainland China, smartphone market share reached 15.2%, up from 10.5% in 2019 [5][6] - The number of connected devices on the AIoT platform reached 434 million, up 33.6% year-over-year [9][11] Company Strategy and Development Direction - The company plans to invest over 100 billion RMB in R&D over the next five years, focusing on innovation and premiumization of products [2][4] - The strategy includes strengthening both online and offline distribution channels, with over 10,200 stores in mainland China by the end of 2021 [3][6] - The company aims to enhance operational efficiency in offline retail stores and improve sales and customer service capabilities [3][6] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the smartphone market's growth potential despite geopolitical tensions and supply chain challenges, particularly in Europe and Latin America [17][18] - The supply situation is expected to improve significantly in the second half of 2022, with continued efforts to enhance market share [19][22] - Management highlighted the importance of R&D investment and premium product offerings to drive future growth [18][20] Other Important Information - The company repurchased 8.4 billion Hong Kong dollars of its own shares in 2021 and announced a new 10 billion stock buyback program for the next year [15] - Xiaomi received recognition for its ESG efforts, including an Award of Excellence in ESG and being named in Forbes' World's Best Employees list [15][16] Q&A Session Questions and Answers Question: What do you expect for smartphone shipments in 2022 given global geopolitical tensions and pandemic issues in China? - Management noted that despite external challenges, the smartphone market remains large, with significant growth potential in Europe and Latin America [17][18] Question: Should we expect a more normalized margin trend in 2022? - Management indicated that Q4's gross margin was impacted by promotional activities but expressed confidence in maintaining a healthy gross margin moving forward [19][20] Question: How should we think about the cost of the EV business in 2022? - The majority of expenditures for the EV business will be R&D related, with further disclosures expected as the year progresses [21] Question: What is the latest status on Xiaomi's smartphone component supply? - Management stated that while Q1 faces challenges, significant improvements in supply are anticipated in Q2 and beyond [22]

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Financial Performance - Xiaomi's revenue for 2020 reached 245.9 billion yuan, a year-on-year increase of 19.4%[6] - The company's adjusted net profit for 2020 was 13 billion yuan, up 12.8% year-on-year[6] - Revenue increased by 5% year-over-year in 2020, reaching $5 billion[7] - Revenue for 2021 increased by 15% compared to the previous year, driven by growth in AIoT and other new technologies[9] - Total revenue for 2020 reached 245.87 billion, representing a 19.4% year-over-year growth[16][20] - Net profit for 2020 was 24.03 billion, a significant increase compared to previous years[16] - Revenue for 2020 increased by 19.4% to RMB 245.9 billion compared to RMB 205.8 billion in 2019[39] - Operating profit for 2020 was RMB 36.8 billion, up from RMB 28.6 billion in 2019[38] - Net profit attributable to shareholders increased to RMB 20.3 billion in 2020 from RMB 10.1 billion in 2019[38] - Total revenue for 2020 reached 238 billion, a year-over-year increase of 19.7%[25] - Revenue for 2020 increased by 41.0% to 904.6 million compared to 2019, reaching 1,275.8 million[75] - Total revenue for the year reached 1,814.2 million, a 38.3% increase, driven by strong performance in the IoT and other segments[44] - Total revenue for 2020 reached 70,462.9 million, a 24.8% increase compared to 2019[62] - Net profit for 2020 was 8,795.0 million, up from 2,436.2 million in 2019[60] - Revenue for the fiscal year ending December 31, 2020, reached 22,074 million, an increase from 20,418 million in the previous year[117] - Net profit for the fiscal year ending December 31, 2020, was 15,363 million, with a significant increase in net profit margin[117] - Total revenue for the year ending December 31, 2020, was $491,799,970, with a net profit of $184,201,077[137] - The company's revenue for 2020 reached 139.3 billion, a 77.2% increase compared to the previous year[98] - The company's revenue for 2020 was 1,245.9 billion, a 40.5% increase compared to the previous year[99] - The company's revenue for 2020 was 586.3 billion, an 88.8% increase compared to the previous year[100] - Revenue for 2020 increased by 8.3% to 20,312,710, with a net profit margin of 5.3%[104] - The company's net profit for 2020 was 13,006,363, showing a strong financial performance[104] - Total revenue for the quarter ending December 31, 2020, was $13,527.5 million, a 10% increase from the previous quarter[110] - Net profit for the quarter ending December 31, 2020, was $22,375.7 million, a significant increase from the previous quarter's loss of $953.5 million[110] - Total revenue for the year ended December 31, 2020, was $62.66 billion[127] - The company reported a net income of $48.41 million for 2020, representing a 10.52% increase year-over-year[128][129] - Revenue for the year 2020 reached 107,930,000, representing a growth of 107.93% compared to the previous year[153] - Pinecone International's revenue reached 9,532,868, with a net profit margin of 48%[156] - Revenue in 2020 increased by 45% compared to 2019, reaching 763 million[180] - The company's net profit margin improved by 15% in 2020, driven by cost optimization and operational efficiency[183] Market Expansion and Global Presence - The company expanded its global market presence, with international markets accounting for a significant portion of its revenue[6] - In 2020, the company expanded its market presence in Southeast Asia, achieving a 15% market share in the region[7] - Overseas revenue accounted for 77.40 billion in 2020, showing strong international market expansion[17] - Xiaomi's overseas revenue grew by 34.1% year-over-year to 122.4 billion yuan, accounting for 49.8% of total revenue[21] - Market expansion strategy includes entering 3 new international markets in 2022[9] - Revenue from international markets accounted for 57.3% of total revenue in Q4 2020[27] - Market share in India reached 27.4% in Q4 2020, with a 13% increase year-over-year[27] - Revenue from overseas markets in 2020 was 382 billion, a 34.4% increase from 284 billion in 2019[70] - The company's market expansion strategy in 2021 focuses on increasing its market share by 30% through new product launches[141] - The company's market share in the Asia-Pacific region grew by 10% in 2020, driven by successful marketing campaigns[180] - The company's subsidiary, LinkedIn, expanded its market presence by entering new regions, contributing to a 47% increase in revenue[176] - Rokid Corporation Ltd's international revenue grew by 25% in 2020, with significant contributions from the European and North American markets[175] - Pinecone's market expansion strategy includes entering new regions with a focus on Southeast Asia and Latin America[158] R&D and Innovation - Xiaomi's R&D investment in 2020 increased by 23.5%, focusing on new technologies and product innovation[6] - In 2020, the company invested $500 million in new technology development, focusing on AI and IoT[8] - The company's R&D expenditure in 2020 was $1.5 billion, representing 15% of total revenue[7] - The company plans to invest $500 million in R&D for new AIoT products in the next fiscal year[9] - Xiaomi's R&D expenditure in 2020 reached 10 billion yuan, with plans to increase it further in the next few years[21] - In 2021, the company plans to expand its R&D team by over 5,000 engineers, focusing on AI, IoT, and 5G technologies[36] - The company's R&D expenses in 2020 were 2,892,323, reflecting a commitment to innovation[104] - The company's R&D expenses for the fiscal year ending December 31, 2020, were 40.3 million[126] - The company's R&D expenditure increased by 25% in 2020, reflecting its commitment to innovation[180] - Rokid Corporation Ltd invested in R&D for new technologies, resulting in a 30% increase in innovation-related projects from 2009 to 2018[175] - Rokid Corporation Ltd's R&D expenditure increased by 20% in 2020, focusing on AI and IoT technologies[175] - Pinecone's R&D investment increased by 12.6% compared to the previous year, focusing on AI and machine learning technologies[157] IoT and Smart Devices - The company's IoT and lifestyle products revenue grew significantly, contributing to the overall revenue growth[6] - Xiaomi's smart home ecosystem continued to grow, with over 213 million connected devices as of 2020[3] - The company launched a new AIoT platform in 2017, which has seen significant adoption, contributing to a 20% increase in IoT device sales[7] - IoT and lifestyle products revenue grew to 130 billion in 2020, up 12.8% year-over-year[20] - Xiaomi's AIoT platform connected devices reached 324.8 million units, a year-over-year increase of 38.0%[21] - Xiaomi's IoT and lifestyle products revenue reached 86.7 billion yuan, a year-over-year increase of 43.5%[21] - Revenue from IoT and lifestyle products in 2020 exceeded 30 billion yuan, with shipments surpassing 300 million units[22] - IoT device shipments in 2020 reached 674 million units, an increase of 8.6% year-over-year[23] - The company's IoT and lifestyle products revenue in Q4 2020 accounted for 20.6% of total revenue[24] - IoT and lifestyle products contributed 21,054.4 million, accounting for 29.9% of total revenue[63] - Revenue from IoT devices increased by 38.0% year-over-year, reaching 32.48 billion units[29] - The number of connected IoT devices (excluding smartphones and laptops) reached 324.8 million, a 38.0% increase year-over-year[29] - Revenue from IoT and lifestyle products in 2020 was 211 billion, up 8.0% from 195 billion in 2019[65] - IoT segment revenue in 2020 reached 18.1 billion, a 16.2% increase year-over-year, with operating income at 21.1 billion[87] - IoT segment's operating income for 2020 was 5.9 billion, up 20.3% year-over-year, with revenue at 7.1 billion[87] - IoT segment's operating margin in 2020 was 14.2%, compared to 12.1% in the previous year[93] - Revenue from IoT and smart devices grew by 29.9% to 21,054.4 million in 2020[85] - Rokid Corporation Ltd's market share in the smart home segment grew by 10% in 2020, driven by strong demand for its innovative solutions[175] Smartphone Performance - Xiaomi's global smartphone shipments in 2020 exceeded 130 million units, a 12.8% increase compared to the previous year[6] - Smartphone revenue in 2020 reached 705 billion, with a 24.8% year-over-year growth[20] - Xiaomi's smartphone market share in China increased to 14.6% in 2020, up from 9.2% in 2019[21] - Revenue from smartphone sales in 2020 reached 152.2 billion yuan, a year-on-year increase of 24.6%[22] - Smartphone shipments in 2020 totaled 146.4 million units, up 17.5% year-on-year[22] - Revenue from premium smartphones in 2020 was 42.6 billion yuan, a year-on-year increase of 38.4%[22] - Shipments of premium smartphones in 2020 reached 42.3 million units, up 29.7% year-on-year[22] - Market share of premium smartphones in 2020 increased to 14.6%, up from 9.2% in 2019[22] - The company's global smartphone shipments reached 48 million units in Q4 2020, a 31.7% year-over-year increase[35] - Revenue from smartphones in 2020 reached 426 billion, a 38.4% increase compared to 2019's 308 billion[64] - Smartphone ASP (Average Selling Price) in 2020 rose to 1,009.1, a 6.8% increase from 945.1 in 2019[64] - The company's market share in the smartphone segment increased to 8.7% in 2020, up from 7.2% in 2019, driven by new product launches like Mi 10 and Redmi series[51] - Revenue from smartphone sales increased by 135% year-over-year, reaching $135 million[111] User Base and Engagement - Xiaomi's user base expanded, with over 362 million monthly active users on its MIUI platform[3] - User base grew by 30% in 2020, with 130 million active users[8] - MIUI monthly active users reached 396.3 million in December 2020, a 28.0% increase year-over-year[19] - MIUI monthly active users grew to 396.3 million, up 28.0% year-over-year[21] - MIUI monthly active users reached 396.3 million in December 2020, a 28.0% increase year-over-year[25] - MIUI monthly active users grew to 480 million in December 2020, a 28.0% increase year-over-year[35] - MIUI monthly active users reached 309.6 million in December 2019, a 28.0% increase, and are projected to reach 396.3 million by December 2020[43] - MIUI monthly active users grew to 396.3 million in December 2020, a 28.0% increase from 309.6 million in December 2019[66] - The company's user base grew by 37.9% from 23 million in 2019 to 31 million in 2020[75] - The company's user base grew by 51% in 2020, with 20 million new users added since 2016[180] - The company achieved a 20% year-over-year growth in user base, highlighting successful market expansion[150] - Pinecone's user base grew by 20% year-over-year, reaching 1,118,806,541 users[163] - The company's subsidiary, LinkedIn, saw a 39% increase in revenue, reaching $700 million in 2020[176] - The company's subsidiary, LinkedIn, achieved a 44% increase in revenue, driven by a 51% increase in user engagement[177] - The company's subsidiary, LinkedIn, saw a 40% increase in revenue, reaching $1 billion in 2020[177] - The company's subsidiary, LinkedIn, achieved a 47% increase in revenue, driven by a 53% increase in user engagement[177] - The company's subsidiary, LinkedIn, saw a 51% increase in revenue, reaching $1.2 billion in 2020[177] - The company's subsidiary, LinkedIn, achieved a 53% increase in revenue, driven by a 51% increase in user engagement[177] Product Launches and Portfolio - The company launched new products, including the Mi Smart Camera Pro and Mi Air Purifier, to strengthen its product portfolio[4] - The company plans to launch a new product line in 2021, targeting a 20% increase in revenue from new products[7] - Redmi K40 series launched in February 2021 with a starting price of 1,999 yuan[22] - Redmi Note 9 series achieved cumulative shipments of 30 million units by the end of 2020[22] - The company launched the Redmi MAX 86" smart TV in February 2021, priced at 7,999 RMB[23] - The company launched the Redmi AX6000 Wi-Fi 6 router in December 2020, priced at 599 RMB[24] - The company launched the RedmiBook Pro laptop in February 2021, priced at 4,699 RMB[23] - The company launched 120W fast charging technology in 2020, significantly improving charging speeds[33] - The company plans to launch a new product line in 2021, targeting the premium segment of the market[180] - Rokid Corporation Ltd's revenue from new products accounted for 50% of total revenue in 2020, reflecting successful product diversification[175] - The company's new product launches contributed to a 28.0467% increase in customer engagement[149] Strategic Acquisitions and Partnerships - The company completed a $200 million acquisition of a competitor in Q4 2021[9] - The company completed a $3 billion IPO in 2018, with proceeds used for R&D and market expansion[7] - The company completed a share repurchase program, repurchasing 48,410,000 shares in 2020[129] - The company's subsidiary, Pinecone International, expanded its operations, contributing to the overall growth strategy[130] - Rokid Corporation Ltd expanded its market presence through strategic acquisitions, including a significant deal with GP Industries Limited in 2020[175] - Pinecone's merger and acquisition strategy includes targeting companies with a strong presence in emerging markets[161] - In 2021, the company completed a strategic acquisition worth 500,000 million, aimed at enhancing its market position[182] - The company has a history of partnerships with Google Inc. from 2006 to 2010 and Microsoft Corporation from 1995 to 2006[172] - The company was involved in the establishment of ADP Inc. in May 1993[172] - The company has a long history in the technology sector, starting from July 1990 with various partnerships and establishments[172] - The company has a significant presence in the design and technology education sector, with affiliations to Art Center College of Design since April 2010[173] - 5Y Capital, associated with the company since June 2007, has investments in Xunlei Limited (XNET), JOYY Inc. (YY), Agora, Inc. (API), and XPeng Inc. (XPEV)[173] - XPeng Inc. (XPEV) was established in August 2020[173] - The company's strategic acquisitions and partnerships resulted in a 3.8325% increase in operational efficiency[151] - Pinecone International's revenue growth was supported by strategic mergers and acquisitions[154] Financial Strategy and Capital Management - The company's debt-to-equity ratio improved by 44.5% in 2020, indicating better financial health[107] - The company's total liabilities decreased by 88.9% in 2020, showing effective debt management[107] - Xiaomi Best Time International Limited issued bonds worth $6 billion with a coupon rate of 3.375% maturing in 2030[108] - Xiaomi Best Time International Limited issued bonds worth $855 million with a coupon rate of 2.875% maturing in 2027[109] - The company issued 1,000,000,000 shares at 23.70 per share to Smart Mobile Holdings Limited on December 4, 2020[123] - The company issued 6 million shares at 3.375% interest to Xiaomi Best Time International Limited on April 29, 2020[126] - The company's total liabilities as of December 31, 2020, were 855 million, with a significant portion due

Xiaomi Corporation (OTCPK:XIACF) Q3 2020 Earnings Conference Call November 24, 2020 7:00 AM ET Company Participants Steve Lin - Director, Corporate Finance and Joint Company Secretary Lei Jun - Founder, CEO, and President Alain Lam - VP and CFO Conference Call Participants Kyna Wong - Credit Suisse Leping Huang - CICC Piyush Mubayi - Goldman Sachs Gokul Hariharan - JPMorgan Frank He - HSBC Steve Lin Good evening, ladies and gentlemen. Welcome to the Investor Conference Call hosted by Xiaomi Corporation rega ...

nl Xiaomi Corporation Q3 2020 Results Announcement Disclaimer By attending the meetling where this presentation is made, or by reading the presentation materials, you agree to be bound by the following limitations: The information in this presentation has been prepared by representatives of Xiaomi Corporation (the "Company"，and together with its subsidiaries, the "Group") for use in presentations by the Group and does not constitute a recommendation regarding the securities of the Group. No part of this pre ...