Xiaomi's Q3 Net Profit Surged by 182.9% YoY, while R&D Spending Rises to CNY 5 Billion

Technology Author: Muriel Meng Editor: 陈迪 Nov 21, 2023 03:51 PM (GMT+8)

Smartphone makers' product matrix is one of the sources of competitive advantage, and applications such as the Internet of Things and smart electric vehicles will be a future trend.

Xiaomi technology campus

Xiaomi Group (01810: HK) released its third-quarter financial report on November 20 on the Hong Kong Stock Exchange, with third-quarter revenue of CNY 70.89 billion, up 0.6% year-on-year, and third-quarter adjusted net profit of CNY 5.99 billion, surging dramatically by 182.9% year-on-year, which includes the cost of innovative businesses such as smart electric vehicles of CNY 1.7 billion. Xiaomi's third-quarter operating profit of CNY 5.01 billion, estimated CNY 5.37 billion, compared with a loss of CNY 1.36 billion in the same period last year.

The financial report indicated that, according to Canalys data, in the third quarter of 2023, Xiaomi Group ranked in the top three in global smartphone shipments, with a market share of 14.1%, a year-on-year increase of 0.5%, and it was the only brand among the top three to achieve year-on-year growth in shipments in the quarter. At the same time, the scale of Xiaomi Group's global MIUI monthly active users hit another record high. In September 2023, the number of global MIUI monthly active users reached 623.1 million, representing a year-on-year increase of 10.5%.

Specifically, Xiaomi's third-quarter smartphone revenue was CNY 41.65 billion; revenue from the IoT and consumer lifestyle products segment was CNY 20.67 billion, up 8.5% year-on-year; and revenue from Internet services was CNY 7.76 billion, an increase of 9.7% year-on-year. According to the data, the number of connected IoT devices on Xiaomi Group's AIoT platform, excluding smartphones, tablets and notebook computers, increased to 698.9 million as of September 30, 2023, demonstrating a year-on-year growth of 25.2%. 

 In terms of R&D, R&D expenditure for the third quarter of 2023 amounted to CNY 5.0 billion, with a year-on-year increase of 22.0%. The Group plans to invest over CNY 100 billion in R&D over five years since 2022 to 2026. As of September 30, 2023, the number of R&D personnel reached 17,563, accounting for over 53% of the total number of employees. In addition, the Group will continue to extend the Group's intellectual property capabilities, and as of September 30, 2023, the Xiaomi Group has been granted over 35,000 patents worldwide.

As of press time, Xiaomi Group closed at CNY 15.64 apiece, with a market capitalization of CNY 390.817 billion.