Xiaomi Smartphone Demand Rebounds, Q1 Revenue and Profit Beat Estimates

Xiaomi reported steady revenue growth in the first quarter of 2020 despite the disruptions in supply and shipment caused by the COVID-19 pandemic, the company said in its Q1 results Wednesday.

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While most other smartphone makers are bracing for a tough year ahead, Xiaomi said its global smartphone shipments increased amid the COVID-19 pandemic. The company’s mainland China smartphone shipments have already rebounded to pre-pandemic levels, and its smart TV shipments have also largely recovered.

Xiaomi‘s total revenues for the period increased 13.6% year on year to RMB 49.7 billion, beating analyst estimates of RMB 47.86 billion. The company’s adjusted net profit for the first quarter also grew 10.6% compared to RMB 2.3 billion in the same period last year, exceeding the Bloomberg consensus estimate of RMB 2.13 billion.

The company attributed the growth to the surging sales in overseas markets as well as the rising prices of its 5G smartphones. Xiaomi said its overseas revenues in the first quarter reached RMB 24.8 billion, jumping 47.8% year on year and accounting for more than half of the company’s total revenues for the period.

“This is a historical high. At this point, we have become a truly international company,” Wang Xiang, President and Acting Chief Financial Officer of Xiaomi said in the earnings call.

In Latin America, Europe and Africa, Xiaomi‘s smartphone shipments grew by 236.1%, 58.3% and 284.9% year-on-year, respectively, the company said in its Q1 results, citing market researcher Canalys.

Most of Xiaomi‘s first quarter revenues came from its smartphone business, which saw a 12.3% year on year increase to reach RMB 30.3 billion. According to Xiaomi‘s earnings results, it shipped 29.2 million units during the first three months of 2020 and had a global market share of 11.1%.

IoT and lifestyle products, which include consumer hardware such as wrist bands and large home appliances such as smart TVs, contributed 26.2%, or RMB 13 billion to the company’s first quarter revenues despite being significantly affected by the pandemic.

Xiaomi said the number of devices connected to its IoT platform has reached 252 million in the first quarter, marking a 42.6% increase compared to the same period last year. Its AI assistant also saw its MAU surge 54.9% year on year to 70.5 million in March.

Despite the company’s strong first quarter performance, Wang warns of a potentially soft second quarter. According to Wang, strict lockdown measures in overseas markets, such as the ones imposed in India in late March, have significantly impacted sales.