XIAOMI(01810)2023-03-24 10:25Financial Performance - Xiaomi's total revenue for 2022 reached RMB 280 billion, with adjusted net profit of RMB 8.5 billion[3] - Total revenue decreased 14.7% YoY to RMB 280.0 billion in 2022[20] - Adjusted net profit for 2022 was RMB 8.5 billion, compared to RMB 22.0 billion in 2021[36] - Q4 2022 revenue decreased by 22.8% to RMB 66.0 billion from RMB 85.6 billion in Q4 2021[38] - Revenue decreased by 6.3% from RMB 70.5 billion in Q3 2022 to RMB 66.0 billion in Q4 2022[55] - Annual non-IFRS adjusted net profit for 2022 was RMB 8.52 billion, with a net profit margin of 3.0%[73] - Annual non-IFRS adjusted net profit for 2021 was RMB 22.04 billion, with a net profit margin of 6.7%[73] - Revenue for the year ended December 31, 2022, was RMB 280,044 million, a decrease of 14.7% compared to RMB 328,309 million in 2021[87] - Gross profit for 2022 was RMB 47,577 million, down 18.3% from RMB 58,261 million in 2021[87] - Net profit attributable to the company's owners for 2022 was RMB 2,474 million, a significant decrease of 87.2% from RMB 19,339 million in 2021[87] - Total revenue for 2022 decreased to RMB 280,044.02 million from RMB 328,309.15 million in 2021, with smartphone revenue dropping to RMB 167,217.18 million from RMB 208,868.94 million[96][97] - Gross profit for 2022 was RMB 47,577.19 million, down from RMB 58,260.94 million in 2021, with smartphone gross profit declining to RMB 14,968.76 million from RMB 24,861.09 million[96][97] - Net profit attributable to the company's owners decreased significantly to RMB 2,474,030 thousand in 2022 from RMB 19,339,321 thousand in 2021, representing a decline of 87.2%[103] - Diluted earnings per share dropped to RMB 0.10 in 2022 from RMB 0.76 in 2021, a decrease of 86.8%[103] Smartphone Business - Global smartphone shipments in 2022 were 150.5 million units, maintaining the third position globally with a market share of 12.8%[4] - Xiaomi's smartphone business revenue in 2022 was RMB 167.2 billion, with an average selling price (ASP) of RMB 1,111, a record high[6] - In Q4 2022, Xiaomi's smartphone revenue was RMB 36.7 billion, with shipments of 32.7 million units[6] - Xiaomi 13 series achieved the top sales ranking in the RMB 4,000-6,000 price segment in China for seven consecutive weeks post-launch[6] - Redmi K60 series achieved sales of 300,000 units within 5 minutes of its launch in December 2022[7] - Smartphone revenue decreased 19.9% YoY to RMB 167.2 billion, with shipments down 20.9%[22] - Smartphone segment revenue decreased by 27.3% YoY to RMB 36.7 billion in Q4 2022, with shipments dropping 25.9% to 32.7 million units and ASP declining 2.0% to RMB 1,121.0 per unit[40] - Smartphone revenue decreased by 13.7% from RMB 42.5 billion in Q3 2022 to RMB 36.7 billion in Q4 2022, with shipments dropping by 18.6% from 40.2 million units to 32.7 million units[57] - Smartphone segment gross margin declined to 8.2% in Q4 2022, impacted by a one-time cost of RMB 700 million related to updated after-sales service policies[48] - Smartphone segment sales cost decreased by 17.3% from RMB 184.0 billion in 2021 to RMB 152.2 billion in 2022, primarily due to reduced smartphone shipments, partially offset by increased inventory impairment provisions[27] IoT and Lifestyle Products - IoT and lifestyle products revenue in 2022 was RMB 79.8 billion, a year-on-year decrease of 6.1%, but Q4 revenue increased by 12.5% to RMB 21.4 billion[8] - Global smart TV shipments reached 12.4 million units in 2022, a year-on-year increase of 0.6%, despite a 5.6% decline in the global smart TV market[8] - Xiaomi's tablet shipments in China increased by over 160% year-on-year in 2022, with Q4 shipments hitting a record high[9] - IoT and lifestyle products revenue decreased 6.1% YoY to RMB 79.8 billion[23] - IoT and lifestyle products revenue in Q4 2022 accounted for 32.5% of total revenue, up from 29.3% in Q4 2021[39] - IoT and lifestyle products revenue decreased by 14.4% YoY to RMB 21.4 billion in Q4 2022, driven by lower demand for smart TVs and some lifestyle products, partially offset by growth in tablets and smart home appliances[41] - IoT and lifestyle products revenue increased by 12.5% from RMB 19.1 billion in Q3 2022 to RMB 21.4 billion in Q4 2022, driven by growth in smart TVs, laptops, and other consumer products[58] - IoT and lifestyle products gross margin improved to 14.3% in Q4 2022, driven by higher margins in smart home appliances and lower component costs for smart TVs[48] - IoT and lifestyle products segment sales cost decreased by 7.6% from RMB 73.9 billion in 2021 to RMB 68.3 billion in 2022, mainly due to reduced sales of IoT and lifestyle products[28] Internet Services - MIUI monthly active users reached 582.1 million in December 2022, a year-on-year increase of 14.4%[4] - Overseas internet service revenue in 2022 reached RMB 6.8 billion, a year-on-year increase of 35.2%, with Q4 revenue hitting a record high of RMB 1.9 billion[10] - Xiaomi's game business revenue in 2022 was RMB 4.1 billion, a year-on-year increase of 4.4%, with Q4 revenue up 8.7% to RMB 1 billion[11] - MIUI monthly active users globally reached 582.1 million in December 2022, a year-on-year increase of 14.4%, with 143.7 million in mainland China, up 10.7%[10] - Overseas internet service revenue increased 35.2% YoY to RMB 6.8 billion[24] - Internet services revenue in Q4 2022 accounted for 10.9% of total revenue, up from 8.5% in Q4 2021[39] - Internet services revenue decreased by 1.4% YoY to RMB 7.2 billion in Q4 2022, while MIUI MAUs increased by 14.4% YoY to 582.1 million in December 2022[42] - Internet services revenue increased by 1.5% from RMB 7.1 billion in Q3 2022 to RMB 7.2 billion in Q4 2022, primarily due to growth in advertising revenue[58] - Internet services segment sales cost increased by 9.0% from RMB 7.3 billion in 2021 to RMB 8.0 billion in 2022, driven by higher costs in advertising, TV value-added services, and gaming, partially offset by reduced financial technology costs[29] AIoT Platform - AIoT platform connected devices (excluding smartphones, tablets, and laptops) reached 589.4 million, up 35.8% year-on-year[4] - AIoT platform connected IoT devices reached 589.4 million, a 35.8% YoY increase[15] - Users with five or more connected IoT devices reached 11.6 million, a 32.5% YoY increase[15] - Monthly active users of "Xiao Ai" assistant grew 7.1% YoY to 114.6 million[15] - MIUI 14 improved system fluency by 60% and AIoT product discovery speed by 50%[15] - Offline channel AIoT product GMV increased over 27% YoY in 2022[16] - Monthly average GMV per store in Jan-Feb 2023 increased over 30% compared to Q4 2022[16] Overseas Market - Overseas market revenue accounted for 49.2% of total revenue, reaching RMB 137.8 billion in 2022[5] - Revenue from Mainland China accounted for 50.8% of total revenue in 2022, slightly up from 50.2% in 2021[98] R&D and Innovation - R&D expenditure in 2022 was RMB 16 billion, with a compound annual growth rate of 38.4% from 2017 to 2022[5] - Xiaomi's global patent portfolio exceeded 30,000 patents, covering over 60 countries and regions as of December 31, 2022[5] - Xiaomi's smart electric vehicle R&D team has grown to approximately 2,300 people, with a target for mass production in the first half of 2024[14] - R&D expenses increased by 21.7% from RMB 13.2 billion in 2021 to RMB 16.0 billion in 2022, primarily due to increased expenses in innovative businesses such as smart electric vehicles[30] - R&D expenses increased by 22.0% YoY to RMB 4.7 billion in Q4 2022, primarily due to higher costs in innovative businesses like smart electric vehicles[49] - Research and development expenses increased by 21.7% to RMB 16,028 million in 2022 compared to RMB 13,167 million in 2021[87] Brand and User Loyalty - Xiaomi's brand loyalty ranked first among Android smartphone manufacturers in China for two consecutive years, with 50.1% of users choosing Xiaomi again when replacing smartphones[7] Cash Flow and Financial Position - Cash and cash equivalents as of December 31, 2022, were RMB 27.607 billion, a decrease from RMB 28.071 billion as of September 30, 2022[77] - Total cash resources as of December 31, 2022, amounted to RMB 94.3 billion, including cash and cash equivalents, restricted cash, short-term and long-term bank deposits, and short-term and long-term investments[75] - Net cash generated from operating activities in Q4 2022 was RMB 4.112 billion, compared to a net cash used in operating activities of RMB 1.470 billion in Q3 2022[77] - Net cash used in investing activities in Q4 2022 was RMB 708.1 million, primarily due to changes in long-term bank deposits[79] - Net cash used in financing activities in Q4 2022 was RMB 3.617 billion, mainly due to changes in borrowings and credit facility payables[80] - Total borrowings as of December 31, 2022, were RMB 23.6 billion, down from RMB 25.8 billion as of September 30, 2022[80] - Capital expenditures in Q4 2022 were RMB 1.379 billion, a decrease from RMB 1.703 billion in Q3 2022[81] - The company invested in over 420 companies and other long-term investments, with a total book value of RMB 63.9 billion as of December 31, 2022, a 5.9% year-over-year increase[81] - The company's cash and cash equivalents increased by 17.4% to RMB 27,607 million as of December 31, 2022, from RMB 23,512 million at the end of 2021[89] - Operating cash flow for 2022 was negative at RMB 4,389.73 million, compared to a positive RMB 9,785.29 million in 2021[91] - Net cash from investing activities in 2022 was RMB 15,548.77 million, a significant improvement from the negative RMB 45,007.95 million in 2021[91] - Cash and cash equivalents at the end of 2022 increased to RMB 27,607.26 million from RMB 23,511.58 million at the end of 2021[91] Expenses and Costs - Gross profit decreased by 18.3% from RMB 58.3 billion in 2021 to RMB 47.6 billion in 2022, with gross margin dropping from 17.7% to 17.0%[29] - Gross profit decreased by 22.4% YoY to RMB 11.4 billion in Q4 2022, with gross margin slightly increasing to 17.2% from 17.1% in Q4 2021[48] - Total sales cost decreased by 22.9% YoY to RMB 54.7 billion in Q4 2022, with smartphone sales cost dropping 25.7% to RMB 33.7 billion[44][45] - Sales and marketing expenses increased by 19.9% from RMB 4.9 billion in Q3 2022 to RMB 5.9 billion in Q4 2022, driven by higher advertising and promotional spending[65] - Employee benefits expenses increased to RMB 16,607.99 million in 2022 from RMB 13,821.53 million in 2021[99] - Inventory impairment provisions rose significantly to RMB 7,794.47 million in 2022 from RMB 2,831.53 million in 2021[99] - Tax expenses decreased to RMB 1,431.39 million in 2022 from RMB 5,133.80 million in 2021[100] - Inventory impairment provisions increased significantly to RMB 3,470,360 thousand in 2022 from RMB 1,331,147 thousand in 2021, representing a 160.7% increase[106] Investments and Equity - The company invested in over 420 companies and other long-term investments, with a total book value of RMB 63.9 billion as of December 31, 2022, a 5.9% year-over-year increase[81] - Fair value changes of investments shifted from a loss of RMB 2.4 billion in Q3 2022 to a gain of RMB 3.8 billion in Q4 2022, primarily due to gains in preferred stock investments[65] - Share of profits from equity-accounted investments turned from a loss of RMB 265.0 million in Q3 2022 to a profit of RMB 3.6 million in Q4 2022, driven by improved performance of investee companies[66] - Short-term investments measured at fair value through profit or loss decreased to RMB 9,845,910 thousand in 2022 from RMB 29,311,848 thousand in 2021, a reduction of 66.4%[104] - Long-term investments in equity securities (ordinary shares) decreased to RMB 18,726,499 thousand in 2022 from RMB 22,755,228 thousand in 2021, a decline of 17.7%[104] Share Transactions and Capital - The company repurchased a total of 235,248,000 B-class shares during the reporting period, with a total consideration of approximately HKD 2,756,518,651[112] - A total of 6,392,324 Class A shares were converted into Class B shares on March 11, 2022, with 5,756,989 shares converted by Lei Jun through Smart Mobile Holdings Limited and 635,335 shares by Bin Lin through Bin Lin 2021 A Trust[113] - A total of 13,488,051 Class A shares were converted into Class B shares on June 10, 2022, with 12,147,469 shares converted by Lei Jun through Smart Mobile Holdings Limited and 1,340,582 shares by Bin Lin through Bin Lin 2021 A Trust[113] - A total of 24,341,769 Class A shares were converted into Class B shares on October 28, 2022, with 21,922,431 shares converted by Lei Jun through Smart Mobile Holdings Limited and 2,419,338 shares by Bin Lin through Bin Lin 2021 A Trust[113] - A total of 2,937,275 Class A shares were converted into Class B shares on March 22, 2023, with 2,645,338 shares converted by Lei Jun through Smart Mobile Holdings Limited and 291,937 shares by Bin Lin through Bin Lin 2021 A Trust[113] - The company received net proceeds of approximately 889.6 million from the 2027 bonds, intended for increasing working capital, expanding market share, investing in strategic ecosystems, and other general corporate purposes[119] - The company received net proceeds of approximately 392.8 million from the green bonds, intended for financing or refinancing eligible projects under the company's green financing framework[121] Other Financial Metrics - Other income increased by 186.8% YoY to RMB 588.7 million in Q4 2022, mainly due to higher government subsidies[51] - Other income increased by 200.9% from RMB 195.7 million in Q3 2022 to RMB 588.7 million in Q4 2022, primarily due to increased government subsidies[67] - Other net losses increased by 27.3% from RMB 415.0 million in Q3 2022 to RMB 528.3 million in Q4 2022, mainly due to deemed disposal losses from equity-accounted investments[67] - Net financial income increased by 163.0% from RMB 170