XIAOMI(01810)2022-03-22 12:00Financial 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]