#kamisukareview – Xiaomi Corporation (Xiaomi) announced solid growth across all business segments in the first quarter of 2020. Revenues for the first three months of 2020 reached 49.7 billion renminbi (or 102.9 trillion Rupiah *), representing 13.6 percent year-on-year or YoY growth.
This came from the announcement of the results of the unaudited consolidation for the three months ended March 31, 2020 on Wednesday (5/20). Adjusted net profit reached 2.3 billion renminbi (or 4.7 trillion Rupiah *), an increase of 10.6 percent YoY.
According to market research firm Canalys, Xiaomi succeeded through weakening the market to be able to achieve YoY growth in terms of shipping among the five major smart phone companies in the world.
Meanwhile, the penetration ratio of smart phones with 5G technology from Xiaomi in China reached 25.9 percent or exceeded the industry average. This also illustrates how Xiaomi leads the 5G smartphone market as well as its success in implementing the dual engine strategy “5G + AIoT”.
Q1 2020 Financial Highlights:
• Total revenue reached 49.7 billion renminbi (or 102.9 trillion Rupiah *), up 13.6 percent YoY, beating the market average.
• Gross profit reached 7.56 billion renminbi (or IDR 15.6 trillion *), up 44.9% year on year
• Adjusted net income according to Non-IFRS provisions reached 2.3 billion renminbi (or 4.7 trillion Rupiah *), up 10.6 percent YoY.
• Expenditures for research and development reached 1.9 billion renminbi (or 3.9 trillion Rupiah *), up 13.4 percent YoY.
Xiaomi founder and CEO Lei Jun said, “Even though the industry faces serious challenges, the Group can still grow in all segments despite weakening markets, which can illustrate Xiaomi's flexible, resilient and competitive business model.
“In the first quarter of 2020, we successfully issued the first US dollar bonds which were 7.5 times oversubscribed; we also re-entered the “2000 Global Forbes List” this year, which became an international capital market recognition for Xiaomi. “
Lei Jun continued, “We believe that a crisis can be a true test in testing the principles, business models, and growth potential of a company. As the impact of the pandemic diminishes, we will continue to focus on the '5G + AIoT' strategy and strengthen our investment with the aim of enabling everyone in the world to enjoy a better life through innovative technology. “
IoT Business Continues to Grow
In the first quarter of 2020, Xiaomi's revenue from the IoT product segment and lifestyle reached 13 billion renminbi (or 26.9 trillion Rupiah *). Thanks to Xiaomi's diverse IoT product offerings and solid business foundations, the Group achieved 7.8 percent revenue growth amid a pandemic.
As the world's IoT platform leader, the number of IoT devices connected (except smart phones and laptops) to the Xiaomi platform grew to 252 million units as of March 31, 2020 or grew 42.6 percent YoY. Therefore, the number of users who have five or more devices connected to Xiaomi's platform (except smart phones and laptops) reached 4.6 million, growing 67.9% year on year.
In March 2020, AI Assistant “Xiao Ai” had 70.5 million monthly routine users, up 54.9% year on year; The Mi Home application has 40 million active monthly users, growing 53.3% year on year.
Despite the decline in global TV shipments due to a pandemic during the first quarter of 2020, global smart TV shipments from Xiaomi still show growth of 3 percent YoY to 2.7 million units, and the smart TV business continues to lead positions in mainland China and overseas markets.
According to research company All View Cloud (AVC), in the first quarter of 2020, TV shipments from Xiaomi in mainland China ranked first in five quarters in a row, global TV shipments ranked in the top five.
Half of the Income comes from Outside China
Xiaomi's revenue from outside China increased 47.8% year on year to 24.8 billion renminbi (or 51.4 trillion Rupiah *) in the first quarter of 2020 or contributed 50 percent of total revenue. This achievement occurred for the first time.
In the first quarter of 2020, Xiaomi mobile phones controlled about 31.2 percent of shipments in India, and ranked first for 11 consecutive quarters, according to IDC reports. Xiaomi is increasing their position in India, while accelerating its growth in the adjacent market.
Based on Canalys' report, Xiaomi was ranked first in smartphone shipments in Nepal for the first time in the first quarter of 2020 with a 30.9 percent market share, equivalent to the accumulated market share of the second and third ranked mobile brands.
For the European market, Xiaomi smart phone shipments grew 58.3% year on year, contributed 14.3% market share and ranked in the top four. Xiaomi is also ranked in the top four in Italy, France and Germany.
Still quoting from Canalys' report, Xiaomi smartphone shipments in Western Europe increased 79.3% year on year. In Spain, Xiaomi became the number one cellphone company in shipping with a 28 percent market share.
Shipments of smart phones to the Latin American market recorded growth of up to 236.1% year on year, placing Xiaomi in the top five, achieving that contrary to stagnant market conditions. In addition, smartphone shipments in the Middle East and Africa grew 55.2 percent and 284.9 percent respectively.
Revenue from Internet Services Continues to Grow
Revenues from Xiaomi internet services were recorded at 5.9 billion renminbi (or 12.2 trillion Rupiah *) in the first quarter of 2020, representing 38.6 percent YoY growth. User activity and time spent on their devices grew in the first quarter of 2020. In March 2020, monthly active users from MIUI increased 26.7% year on year to 330.7 million while the number in China reached 111.5 million.
Advertising revenue reached 2.7 billion renminbi (or 5.6 trillion Rupiah *) or grew 16.6 percent YoY thanks to various monetization methods, including through search, pre-installed applications and news flow, including optimization of algorithms.