Xiaomi Corp Class B ((HK:1810)) has held its Q4 earnings call. Read on for the main highlights of the call.
Xiaomi Corp Class B’s recent earnings call painted a picture of robust growth and strategic advancements. The company celebrated impressive increases in both revenue and net profit, largely driven by strong performances in their mobile phone and IoT segments. Despite facing challenges such as component pricing and overseas market adjustments, the overall sentiment of the call was positive, highlighting significant achievements in product performance and market expansion.
Record-Breaking Revenue and Growth
Xiaomi Group achieved a new historical high in both annual revenue and net profit for 2024. The company reported total revenue of JPY365.9 billion, marking a 35% increase year-on-year. Additionally, the adjusted net profit reached JPY27.2 billion, a 41% rise, underscoring the company’s strong financial performance.
Strong Performance in Mobile Phone Segment
The mobile phone segment continued to thrive, with shipments increasing by over 15% year-on-year. Xiaomi maintained its position in the top three global market shares for 18 consecutive quarters, with a global market share increase of 1 percentage point, reaching 13.8%.
IoT and Consumer Products Growth
Xiaomi’s IoT and consumer products segment surpassed RMB100 billion for the first time, demonstrating a 30% year-on-year growth. The gross profit margin also reached a new high of 20.3%, reflecting a 3.9 percentage point increase, showcasing the segment’s profitability.
AI and R&D Investment
Xiaomi’s commitment to innovation is evident in its R&D investment, which amounted to JPY24.1 billion in 2024. The company plans to increase this to JPY30 billion in 2025, with a significant portion dedicated to AI development, highlighting its focus on technological advancement.
Expansion of Xiaomi Home Stores
By the end of 2024, Xiaomi had established approximately 15,000 Xiaomi Home stores and 200 automobile sales stores in China. The company plans to expand further by adding 5,000 more stores in China and 500 overseas stores, indicating a strong retail growth strategy.
Successful High-End Strategy
Xiaomi’s high-end products, such as the Xiaomi 15 Ultra and Xiaomi SU7 Ultra, have performed exceptionally well. The SU7 Ultra, in particular, exceeded 10,000 locked-in orders in less than three days, showcasing the success of Xiaomi’s premiumization strategy.
Internet Services Revenue Growth
The internet services segment reached a new revenue high of RMB34.1 billion, a 13.33% increase year-on-year. The gross profit margin also improved by 2.5 percentage points to 76.6%, indicating strong performance in this segment.
Challenges in Component Pricing
Despite overall growth, Xiaomi faced pressure on its mobile phone gross margin due to component pricing. However, the annual gross profit margin remained relatively stable at 12.6%, demonstrating resilience in the face of cost challenges.
Losses in Smart EV and Innovative Businesses
Xiaomi’s Smart EV and other innovative businesses reported a loss of JPY6.2 billion, though this was a 7.1% improvement year-on-year, indicating progress in these emerging areas.
Overseas Market Challenges
Xiaomi’s overseas market, particularly in Western Europe, experienced strategic adjustments leading to a dip in market share. The company is focusing on controlling sales of certain products while boosting sales of mid and high-range products.
Forward-Looking Guidance
Looking ahead, Xiaomi is optimistic about continued growth. The company plans to increase its R&D investment to JPY30 billion in 2025 and aims to deliver 350,000 new cars. With a focus on technological innovation, high-end development, and expanded retail presence, Xiaomi is poised for further success.
In conclusion, Xiaomi Corp Class B’s earnings call reflected a positive outlook, with significant growth in revenue and strategic advancements across various segments. The company’s focus on innovation, high-end product success, and retail expansion positions it well for future growth, despite facing some challenges in component pricing and overseas markets.