XIAOMI(01810)2024-05-23 09:25Financial Performance - Xiaomi's total revenue for Q1 2024 reached RMB 75.5 billion, a 27.0% year-over-year increase[3] - Adjusted net profit for Q1 2024 was RMB 6.49 billion, a 100.8% year-over-year increase[3] - Total revenue in Q1 2024 was RMB 75.5 billion, a 27.0% YoY increase from RMB 59.5 billion in Q1 2023[14] - Adjusted net profit under non-IFRS measures was RMB 6.49 billion in Q1 2024, compared to RMB 3.23 billion in Q1 2023[13] - Gross profit increased by 45.2% from RMB 11.6 billion in Q1 2023 to RMB 16.8 billion in Q1 2024, with gross margin improving from 19.5% to 22.3%[22] - Adjusted net profit surged 100.8% from RMB 3.2 billion in Q1 2023 to RMB 6.5 billion in Q1 2024[28] - Revenue increased by 3.1% from RMB 73.2 billion in Q4 2023 to RMB 75.5 billion in Q1 2024[30] - Gross profit increased by 7.8% from RMB 15.6 billion in Q4 2023 to RMB 16.8 billion in Q1 2024, with gross margin improving from 21.3% to 22.3%[37] - Profit for the period was RMB 4.2 billion in Q1 2024, compared to RMB 4.7 billion in Q4 2023[44] - Adjusted net profit increased by 32.2% from RMB 4.9 billion in Q4 2023 to RMB 6.5 billion in Q1 2024[44] - Revenue for the three months ended March 31, 2024, increased to RMB 75,506,822 thousand, up 27% from RMB 59,477,134 thousand in the same period last year[60] - Gross profit rose to RMB 16,829,717 thousand, a 45% increase compared to RMB 11,591,567 thousand in 2023[60] - Net profit attributable to the company's owners was RMB 4,182,061 thousand, slightly down from RMB 4,203,839 thousand in the same period last year[60] - Total revenue for the three months ended March 31, 2024, was RMB 75.51 billion, a significant increase from RMB 59.48 billion in the same period last year[67] - Net profit attributable to the company's owners for Q1 2024 was RMB 4,182,061 thousand, slightly down from RMB 4,203,839 thousand in Q1 2023[73] - Diluted earnings per share for Q1 2024 were RMB 0.16, compared to RMB 0.17 in Q1 2023[73] Smartphone Business - Global smartphone shipments in Q1 2024 reached 40.6 million units, a 33.7% year-over-year increase[4] - Xiaomi's global smartphone market share in Q1 2024 was 13.8%, maintaining its position in the top three globally[4] - Xiaomi's smartphone business revenue in Q1 2024 was RMB 46.5 billion, a 32.9% year-over-year increase[7] - Xiaomi's market share in the RMB 5,000–6,000 price segment in mainland China reached 10.1%, a 5.8 percentage point year-over-year increase[7] - Smartphone segment revenue increased by 32.9% from RMB 35.0 billion in Q1 2023 to RMB 46.5 billion in Q1 2024, driven by a 33.7% increase in smartphone shipments to 40.6 million units[16] - Smartphone segment gross margin improved from 11.2% in Q1 2023 to 14.8% in Q1 2024 due to product mix optimization and lower core component costs[22] - Smartphone revenue grew by 5.1% from RMB 44.2 billion in Q4 2023 to RMB 46.5 billion in Q1 2024, driven by a 4.9% increase in ASP to RMB 1,144.7 per unit[31] - Smartphone gross margin decreased from 16.4% in Q4 2023 to 14.8% in Q1 2024 due to higher core component costs and inventory provisions[37] - Smartphone segment revenue increased to RMB 46.48 billion, up from RMB 34.98 billion in the same period last year[67] - Gross profit for the smartphone segment was RMB 6.88 billion, up from RMB 3.93 billion in the previous year[67] IoT and Lifestyle Products - The number of connected IoT devices (excluding smartphones, tablets, and laptops) reached 786.1 million, a 27.2% year-over-year increase[4] - IoT and lifestyle products revenue reached RMB 20.4 billion in Q1 2024, a 21.0% YoY increase, with a segment gross margin of 19.9%, up 4.1 percentage points YoY[8] - IoT and lifestyle products revenue grew by 21.0% from RMB 16.8 billion in Q1 2023 to RMB 20.4 billion in Q1 2024, with tablet revenue surging 70.5% due to a 92.6% increase in global tablet shipments[17] - IoT and lifestyle products revenue slightly increased by 0.1% from RMB 20.3 billion in Q4 2023 to RMB 20.4 billion in Q1 2024, with tablet revenue up 16.6%[32] - IoT and lifestyle products gross margin improved from 13.9% in Q4 2023 to 19.9% in Q1 2024, driven by higher-margin product sales[37] - IoT and lifestyle products segment revenue grew to RMB 20.37 billion, compared to RMB 16.83 billion in the previous year[67] - Gross profit for the IoT and lifestyle products segment was RMB 4.05 billion, compared to RMB 2.65 billion in the same period last year[67] Internet Services - Internet services revenue hit a record RMB 8.0 billion in Q1 2024, up 14.5% YoY, with a gross margin of 74.2%, up 1.9 percentage points YoY[9] - Overseas internet services revenue grew 39.0% YoY to RMB 2.5 billion in Q1 2024, accounting for 31.2% of total internet services revenue, up 5.5 percentage points YoY[10] - Internet services revenue rose 14.5% from RMB 7.0 billion in Q1 2023 to RMB 8.0 billion in Q1 2024, with overseas internet services revenue jumping 39.0% to RMB 2.5 billion[18] - Internet services revenue rose by 2.1% from RMB 7.9 billion in Q4 2023 to RMB 8.0 billion in Q1 2024, primarily due to growth in gaming revenue[33] - Internet services segment revenue rose to RMB 8.05 billion, up from RMB 7.03 billion in the same period last year[67] - Gross profit for the internet services segment was RMB 5.98 billion, up from RMB 5.08 billion in the previous year[67] R&D and Innovation - Xiaomi's R&D expenditure in Q1 2024 was RMB 5.2 billion, a 25.4% year-over-year increase[4] - R&D expenses increased by 25.4% from RMB 4.1 billion in Q1 2023 to RMB 5.2 billion in Q1 2024, driven by investments in smart EV and other innovative businesses[22] - R&D expenses decreased by 5.6% from RMB 5.5 billion in Q4 2023 to RMB 5.2 billion in Q1 2024, with stable spending on smart EV and other innovative projects[38] - R&D expenses increased to RMB 5,159,387 thousand, up 25% from RMB 4,113,360 thousand in the previous year[60] Market Share and Regional Performance - Xiaomi's market share in the Middle East reached 20.9%, a 7.1 percentage point year-over-year increase[7] - Revenue from Mainland China accounted for 49.8% of total revenue, while global other regions contributed 50.2%[68] Cash and Financial Position - Xiaomi's cash reserves as of March 31, 2024, were RMB 127.3 billion, a 34.7% year-over-year increase[6] - The company's total cash resources as of March 31, 2024, amounted to RMB 127.3 billion[50] - Cash and cash equivalents stood at RMB 34.9 billion as of March 31, 2024, compared to RMB 33.6 billion as of December 31, 2023[47] - The net cash used in operating activities for Q1 2024 was RMB 9.3 billion, primarily due to a RMB 8.7 billion increase in inventory and a RMB 3.6 billion increase in prepayments and other receivables[51] - The net cash generated from investing activities for Q1 2024 was RMB 10.7 billion, mainly due to a RMB 6.9 billion net decrease in short-term investments at fair value and a RMB 6.2 billion net decrease in short-term bank deposits[52] - The net cash used in financing activities for Q1 2024 was RMB 100 million, primarily due to RMB 1.9 billion in share repurchases and RMB 1 billion in deferred consideration for intangible asset acquisitions[52] - The company's total borrowings as of March 31, 2024, were RMB 27.7 billion, a slight decrease from RMB 27.9 billion at the end of 2023[53] - Cash and cash equivalents increased to RMB 34,896,211 thousand, up from RMB 33,631,313 thousand at the end of 2023[62] - Net cash used in operating activities was RMB 9,287,058 thousand, compared to net cash generated from operating activities of RMB 1,218,761 thousand in 2023[64] - Net cash generated from investing activities was RMB 10,710,999 thousand, a significant improvement from net cash used in investing activities of RMB 1,622,151 thousand in 2023[64] - Total equity increased to RMB 167,593,801 thousand, up from RMB 164,261,768 thousand at the end of 2023[63] Investments and Share Repurchases - The company invested in approximately 430 companies with a total book value of RMB 65.2 billion as of March 31, 2024, a 2.2% decrease year-over-year[55] - The company repurchased 163,134,400 B-class shares for a total consideration of HKD 2,245,467,263 during Q1 2024[81] - The company repurchased a total of 163,134,400 shares in the first four months of 2024, with a total cost of approximately HKD 2,245,467,263[82] - The number of issued B shares decreased by 138,100,000 due to the cancellation of repurchased shares in January and February 2024, and the ongoing cancellation of shares repurchased in March and April 2024[82] - A total of 29,373,916 A shares were converted to B shares on March 14, 2024, with 26,454,431 shares converted by Lei Jun through Smart Mobile Holdings Limited and 2,919,485 shares converted by Lin Bin through Apex Star LLC[83] - The company has not purchased, sold, or redeemed any securities listed on the Stock Exchange during the three months ended March 31, 2024, and up to the date of the announcement[83] Corporate Governance and Compliance - The company has complied with all provisions of the Corporate Governance Code except for the separation of the roles of Chairman and CEO, which are currently held by Lei Jun[84] - The Audit Committee reviewed the unaudited interim results for the three months ended March 31, 2024, and discussed accounting policies, practices, and internal control matters with senior management and external auditors[85] - As of March 31, 2024, the company was not involved in any significant litigation or arbitration, and there were no pending or threatened significant claims against the company[86] - No other significant events affecting the group occurred between March 31, 2024, and the date of the announcement[87] Employee and Operational Metrics - The company had 35,423 full-time employees as of March 31, 2024, with 17,421 in R&D roles[56] - Employee benefit expenses rose to RMB 5.19 billion, compared to RMB 4.50 billion in the previous year[69] Inventory and Assets - Inventory increased to RMB 51,918,525 thousand in Q1 2024 from RMB 44,422,837 thousand at the end of 2023[76] - Total assets as of March 31, 2024, stood at RMB 326,971,545 thousand, compared to RMB 324,247,439 thousand at the end of 2023[62] - Short-term investments measured at fair value through profit or loss decreased to RMB 13,264,991 thousand in Q1 2024 from RMB 20,193,662 thousand at the end of 2023[73] - Long-term investments measured at fair value through profit or loss decreased to RMB 58,499,936 thousand in Q1 2024 from RMB 60,564,274 thousand at the end of 2023[73] - Trade receivables and bills decreased to RMB 11,213,539 thousand in Q1 2024 from RMB 12,150,928 thousand at the end of 2023[75] - Trade payables decreased to RMB 60,547,077 thousand in Q1 2024 from RMB 62,098,500 thousand at the end of 2023[79] Legal and Tax Issues - Xiaomi India's bank accounts with INR 45,750,963 thousand (approximately RMB 3,969,354 thousand) were restricted due to ongoing tax investigations[80] Smart EV Business - Xiaomi SU7 series cumulative orders reached 88,063 units by April 30, 2024, with 10,000 units delivered by May 15, 2024[11] - Xiaomi aims to deliver over 10,000 Xiaomi SU7 series vehicles monthly by June 2024[11] Miscellaneous - Global monthly active users of Mi Home app reached 89.1 million in March 2024, a 14.0% YoY increase[8] - Global monthly active users reached 658.1 million in March 2024, a 10.6% YoY increase, with 160.4 million in mainland China, up 9.7% YoY[9] - AIoT platform connected devices (excluding smartphones, tablets, and laptops) reached 786.1 million, a 27.2% YoY increase, with 15.2 million users connecting five or more devices, up 24.2% YoY[8] - Cost of goods sold and licensing fees increased to RMB 53.76 billion, up from RMB 42.76 billion in the same period last year[69] - Sales and marketing expenses increased by 33.6% from RMB 4.1 billion in Q1 2023 to RMB 5.5 billion in Q1 2024, driven by higher advertising and logistics costs[22] - Sales and marketing expenses decreased by 7.3% from RMB 5.9 billion in Q4 2023 to RMB 5.5 billion in Q1 2024, mainly due to reduced advertising and promotional activities[39] - Administrative expenses remained stable at RMB 1.5 billion in Q1 2024 compared to Q4 2023, driven by increased credit loss provisions for receivables, partially offset by reduced professional service fees[40] - Fair value changes of financial instruments at fair value through profit or loss shifted from a gain of RMB 600 million in Q4 2023 to a loss of RMB 1.2 billion in Q1 2024, primarily due to fair value losses on listed equity investments[40] - Share of net profit from investments accounted for using the equity method increased by 85.0% from RMB 84.0 million in Q4 2023 to RMB 155.4 million in Q1 2024[40] - Other income decreased by 39.9% from RMB 300 million in Q4 2023 to RMB 200 million in Q1 2024, mainly due to reduced VAT input tax credits and government subsidies[40] - Net finance income increased by 140.2% from RMB 600 million in Q4 2023 to RMB 1.5 billion in Q1 2024, driven by changes in the fair value of financial liabilities payable to fund investors[42] - Income tax expense increased by 7.7% from RMB 974.0 million in Q4 2023 to RMB 1,049.2 million in Q1 2024, primarily due to higher deductible expenses in Q4 2023[43] - Operating profit decreased to RMB 3,683,038 thousand, down 38% from RMB 5,900,209 thousand in 2023[60] - Total borrowings increased to RMB 27,705,897 thousand in Q1 2024 from RMB 27,857,345 thousand at the end of 2023[77]