2024-08-21 23:34Financial Data and Key Metrics - Total revenue for Q2 2024 reached RMB 88.9 billion, a year-on-year increase of 32%, marking a historical high [4] - Core business revenue (mobile phones and AIoT) was RMB 82.5 billion, up 23% year-on-year [4] - Gross profit margin stood at 20.7%, maintaining a healthy level above 20% [4] - Adjusted net profit was RMB 6.2 billion, up 20% year-on-year [5] - Smart EV segment generated revenue of RMB 6.4 billion with a gross profit margin of 15.4% [6] - Net loss from innovative businesses, including Smart EV, narrowed to RMB 1.8 billion [5] Business Line Performance - Smartphone business: Global market share increased by 1.8 percentage points to 14.6%, with significant growth in Latin America, Southeast Asia, and the Middle East [8] - IoT business: Revenue reached RMB 26.8 billion, achieving over 20% year-on-year growth for two consecutive quarters [10] - Smart EV: Delivered 27,307 units of Xiaomi SU7 in Q2, with retail sales exceeding 13,000 units in July [6] Market Performance - China revenue accounted for 57.2% of total revenue, while overseas revenue was 42.8% [14] - In 58 countries and regions, smartphone shipments were within the top 3, and in 70 countries, within the top 5 [8] - Global MAU (Monthly Active Users) for smartphones reached 676 million, a net increase of 69.8 million year-on-year [8] Strategic Direction and Industry Competition - The company is focusing on three growth curves: personal devices (mobile phones, tablets, wearables), large appliances (air conditioners, refrigerators, washing machines), and mobile equipment (vehicles) [12] - The "human times car times home" ecosystem strategy is unique and has begun to show cross-category synergy [13] - The company plans to expand its Smart EV sales and service network to 220 retail stores by the end of 2024, covering 59 cities [6] Management Commentary on Operating Environment and Future Outlook - The external environment in Q2 was marked by fierce competition and supply chain cost pressures, but the company performed steadily [4] - Management expressed confidence in the future of the Smart EV business, citing strong product competitiveness and cost control capabilities [7] - The company expects gross profit margins for Smart EV to improve further in the coming quarters [27] Other Important Information - The company has a cash reserve of RMB 141 billion as of June 30, 2024, up 24.5% year-on-year [22] - R&D expenses amounted to RMB 5.5 billion in Q2, up 20.7% year-on-year [20] - The company was included in the Fortune Global 500 list for the sixth consecutive year and received recognition for its ESG efforts [22] Q&A Session Summary Question 1: Smart EV Gross Profit Margin and New Retail Strategy - The high gross profit margin of 15.4% for Smart EV was attributed to strong supplier support, economies of scale, and effective management capabilities [25][26] - The company plans to expand its new retail model globally, with a target of opening 3,000 retail stores by the end of 2024 [28][29] Question 2: Smartphone Market Share and EV Competitive Strategy - The company's smartphone market share growth was driven by premiumization, technology strategy, and improved supply chain management [34] - For Smart EV, the focus will be on improving delivery capacity and cost efficiency rather than engaging in a price war [36] Question 3: Internet Business Gross Profit Margin and AI Capabilities - The increase in Internet business gross profit margin was due to user scale expansion, improved product structure, and higher overseas revenue share [42][43] - The company views current AI phones as "AI-feature phones" and plans to launch new products with more advanced AI capabilities in the coming months [44] Question 4: IoT Growth and Premiumization Strategy - IoT growth was driven by a shift to self-operation models for key categories like wearables and large home appliances, leading to better control over technology and supply chain [48] - The company is confident in its ability to compete in the RMB 6,000 to RMB 8,000 price range for smartphones but acknowledges challenges in the RMB 10,000+ segment [50] Question 5: Smart EV Delivery and Smart Factory Impact - The company is enhancing production capacity for Smart EV to meet increased demand and improve after-sales service [53] - Smart factory initiatives will focus on high-value-added categories like refrigerators, air conditioners, and washing machines, with 20% of production capacity to be built in-house [54][55]