Xiaomi Records a 4% Revenue Drop with Expanded Gross Profit

Technology Author: Yiru Qian Sep 01, 2023 11:35 AM (GMT+8)

Compared with last year's period, Xiaomi sold 15.8% fewer devices. But it still has some reasons to cheer – it kept its third place globally as a manufacturer and remained 2nd in two major regions – Europe and the Middle East.

Xiaomi's Headquarter

Chinese smartphone maker Xiaomi (1810:HK) announced on Tuesday that its total revenue in the second quarter of the fiscal year 2023 observed an annual decline of 4.0% to come in at CNY 67.35 billion, or approximately USD 9.24 billion.

According to its earnings report for the second quarter and six months ended June 30, 2023, the adjusted net profit was CNY 5.1 billion, of which CNY 1.4 billion in expenses related to its smart Electric Vehicle (“EV”) business and other new initiatives.

Net income changed from net costs of CNY 429.5 million in the first quarter of 2023 to net income of CNY 915.2 million in the second quarter of 2023.

On the other hand, its gross profit jumped by 22.2% compared to the same period in 2022 to reach CNY 14.2 billion. Meanwhile, its operating profit skyrocketed by 133.1% to hit CNY 4.04 billion, or approximately USD 554 million.

According to Canalys, in the second quarter of 2023, Xiaomi maintained the third place in terms of global smartphone shipment ranking with a 12.9% market share, an increase of 1.6 percentage points quarter-over-quarter. Although the global smartphone market continued to experience soft demand, Xiaomi achieved CNY 36.6 billion revenue from its smartphone business with global smartphone shipments amounted to 32.9 million units.

In the second quarter of 2023, the monthly average single-store gross merchandise value (GMV) of Xiaomi's offline stores increased by over 20% YoY. According to third-party data, in the second quarter of 2023, offline channels contributed over 46% of its total premium smartphone units sold in mainland China. "We plan to advance premiumization across our offline channels and further reinforce the synergy between our online and offline channels, elevating the operations of our stores in a more holistic manner," said Xiaomi in the Q2 financial release.

In terms of ESG, Xiaomi is also proactively performing corporate social responsibility and contributing to counter climate change. The company has pledged to achieve carbon neutrality in the operations of its existing businesses along with 100% renewable energy utilization by 2040.

As of press time, Xiaomi closed at HKD 12.36 apiece, with a market capitalisation of HKD 309.01 billion.